Boeing releases earnings, 2013 guidance

By Matt Tomsic
mtomsic@scbiznews.com
Published Jan. 30, 2013

The Boeing Co. is not predicting battery issues aboard its 787 Dreamliner will impact revenues or deliveries during 2013, and the company’s guidance this year has not been impacted by the 787 program’s grounding, company officials said during its quarterly earnings call today.

“Job No. 1 on the 787 is supporting investigations under way on the two battery incidents that occurred early this month,” said Boeing CEO Jim McNerney. “We do believe good progress is being made in narrowing down the potential cause of the events.”

McNerney said the company’s first goal is safety, and regulators and the aerospace giant will restore confidence in the Dreamliner once the investigations determine the cause of a Jan. 7 battery fire aboard a 787 and an emergency landing in Japan about a week later.

McNerney couldn’t answer many questions about the groundings because of the ongoing investigation.

“I cannot talk about any of the specific paths of investigation, but I can ensure you there is a comprehensive root-cause analysis and related series of technology efforts that I am confident will identify the root cause of these incidents,” McNerney said. “When we know the answer, we’ll know the answer, and we’ll act on it.”

The investigation isn’t taking resources from Boeing’s other programs, McNerney said.

“Because of the specialized nature of the technology and of the investigation, it’s not drawing from any critical resources on any other programs we’ve got,” he said.

On Tuesday, the National Transportation Safety Board released another update to its investigation into a fire aboard a Japan Airlines 787 in early January. Battery examinations are ongoing, the agency said, and Boeing is providing fleet information, which will help investigators understand the operating history of the batteries on the 787s.

Fourth quarter, 2012 financials
Boeing’s net income was $978 million for the fourth quarter and $3.9 billion for 2012, decreases of 30% and 3% year-over-year, respectively.

Boeing Commercial Airplanes, the business unit that includes Boeing South Carolina, saw its earnings, revenues and deliveries all increase. For the fourth quarter, Commercial Airplanes reported earnings of $1.3 billion, an increase of 29%; for 2012, it reported earnings of $4.7 billion, up 35%.

Commercial Airplanes delivered 165 jets during the fourth quarter and 601 jets during 2012. The aerospace giant reached a five-per-month production rate for its 787 program during the fourth quarter and delivered 46 Dreamliners during the year, which includes three Lowcountry-built Dreamliners.

The company also released its outlook for 2013 and expects revenues to fall between $82 and $85 billion companywide and between $51 and $53 billion for Boeing Commercial Airplanes. Boeing also expects to deliver more than 60 Dreamliners, which represents at least 9% of the company’s total expected airplane deliveries.

McNerney praised its Lowcountry workforce during the call, saying it has surpassed goals for assembly of the first 787, amount of traveled work, time taken to deliver airplanes and others.

“We’re telling them No. 1, you’re doing a hell of a job, and No. 2, to keep charging,” McNerney said. “By and large, that team exceeded those metrics, and we’re very proud of them.”

Previous coverage

NTSB continues probe of 787 fire
NTSB provides more details on battery fire aboard Boeing’s 787 Dreamliners
NTSB to analyze auxiliary power unit controller aboard 787
U.S., European regulators ground 787

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