Boeing profits up but tougher year awaits
US aerospace giant Boeing has reported a big jump in quarterly earnings, but signalled a leaner 2014 profit outlook after last year's boom.
Boeing's fourth quarter ended on a high note, with the company achieving record annual commercial aircraft deliveries on its way to notching a 26.1% rise in profits compared with the year-ago period.
But Boeing's 2014 earnings forecast pointed to headwinds in both its commercial and defence divisions.
One ripple effect from the late-2013 surge in commercial deliveries was that some of the late-2013 deliveries came early and at the expense of 2014 results, Boeing executives said. As a result, the company now forecasts essentially flat 2014 per-share earnings compared with the 20% gain in 2013.
Also weighing on results is the continued drag of lower US defence spending after government budget cuts. Boeing forecast revenues of $30-$31 billion in 2014 in its defence division, down from $33.2 billion in 2013.
Boeing chief executive Jim McNerney said a late-2013 federal government budget deal brings some relief from some of the worst effects of the sharp sequestration budget cuts.
"That said, we remain very concerned about longer-term budget uncertainty and the ultimate consequences of sequestration on national security, and the potential devastating impact to the nation's industrial base," McNerney said.
McNerney, addressing analysts for the first time since the company announced senior executive changes in December, also said he is not planning to retire "anytime soon".
The Boeing announcement included the promotion of Dennis Muilenburg to president, fuelling speculation about McNerney's plans.
Net earnings in the October-December period were $1.2 billion on revenues of $23.8 billion, compared with $978 million on revenues of $22.3 billion in the year-ago quarter.
Boeing reported full-year 2013 earnings of $4.6 billion on revenues of $86.6 billion, up 17.6% from the 2012 profits of $3.9 billion on revenues of $81.7 billion.
McNerney said the company has a "huge opportunity" after investing heavily in the 787 Dreamliner aircraft and other major new aircraft that are now able to be "harvested" through more cost-effective production.
Production on the 787 has reached 10 per month, but deliveries to customers are still at seven a month; the company said it wants to boost deliveries to 10 per month.
Boeing forecast 2014 earnings of $7.00-$7.20 per share, below analyst estimates for $7.57. Boeing earned $7.07 per share in 2013.
Boeing shares were down 5.4 per cent at $129.76 in midday trade.
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