Boeing News
Boeing: No Production Changes Coming In 2010
The AP (1/27, Freed) reported, "Boeing Co. surprised investors with a bigger-than-expected fourth-quarter profit on Wednesday, and said testing of its two newest planes is on track." Boeing also stated that it will not reduce its production rates, even though its 2010 guidance was lower than expected. Boeing CEO Jim McNerney also said he did not foresee any "major modifications" to the 787 following initial flight tests. Furthermore, "Thanks to...previous orders, all the planes they'll build this year are sold out. And 'customer discussions are not slowing down, they're at a good level, if not, a little stronger' than last year, he said." The article noted that Boeing claimed "lower production of its 777 aircraft, some smaller defense programs, and 'market risks'" accounted for the 2010 guidance. The New York Times (1/28, B4) prints a version of the AP article.
The Wall Street Journal (1/28, B1, Sanders, Keeton) notes that despite the good report today, Boeing predicts it will have a very low operating cash flow in 2010 because of the costs of the 787 and 747-8 planes and a smaller Pentagon budget. This is expected to rise to $5 billion in 2011 when those new models start being delivered. Meanwhile McNerney said the company is "actively considering" a new 737 engine. The Chicago Tribune (1/28, Johnsson) reports Boeing "said Wednesday that it won't likely generate any cash from operations in 2010 and has built up $11.2 billion in reserves to get it through the lean year." This, reportedly "heightens pressure on Boeing CEO Jim McNerney to ensure there aren't any major delays to the planes." According to the article, this "overshadowed" Boeing's profit report.
Meanwhile, according the Los Angeles Times (1/28, Hennigcan), Boeing's profit came "despite facing an economic downturn that shrank orders for airplanes," causing stock to rise 7%. The Seattle Times (1/28, Gates) notes Boeing "defied the gloomy predictions of some analysts and laid out the case for a steady, albeit difficult, 2010." CFO James Bell said Boeing has "ample liquidity" for the future. The article highlighted that analysts "have recently been sharply divided on Boeing's prospects. But the markets reacted positively to the steady production outlook and the guidance offered for 2011." Bloomberg News (1/28, Ray) and the Orlando Sentinel (1/28, Burnett) also report the story.
