Boeing Says 2011 Profit Hurt By 787, Defense Cuts
MINNEAPOLIS (AP) — Boeing Co. said on Wednesday that its 2011 profit will be hurt by delays to its new 787 and higher pension expenses.
The airplane builder and defense company also said its fourth-quarter profit fell 8 percent to $1.16 billion. Revenue dropped 8 percent to $16.55 billion.
Boeing shares fell $2.49, or 3.5 percent, to $69.75 in premarket trading.
Boeing is being hit by several tough-to-manage forces. The 787 is running three years late, and earlier this month it pushed back delivery of the plane from February until at least July. Pension expenses are rising. And the Pentagon as well as overseas governments are tightening defense spending. Half of Boeing’s revenue is from defense and space-related work.
It plans to deliver 485 to 500 airplanes in 2011. That includes 25 to 40 of the new 787s and its revamped 747. It didn’t say how many of each plane it would deliver.
Boeing now says it expects to make $3.80 to $4 per share for 2011 on revenue of $68 billion to $71 billion. Its pension expense will rise from $1 per share last year to $1.58 per share this year. If not for the higher pension expense, its 2011 profit would be closer to the $4.59 per share expected by analysts surveyed by FactSet.
For the fourth quarter, Boeing’s profit worked out to $1.56 per share, down from $1.75 per share a year earlier. Not counting special items, Boeing said it would have earned $1.11 per share, which is about what analysts estimated.
Revenue for Boeing’s commercial airplane division fell 11 percent to $8.18 billion. The operating profit from commercial planes dropped 39 percent to $627 million.
Its defense and space business revenue fell 5 percent to $8.17 billion. Operating profits dropped 2 percent to $816 million.
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