Boeing beat Wall Street expectations for fourth-quarter profit despite a slump in revenue from its defence business.
The company forecast Wednesday that deliveries of commercial airplanes will rise slightly ths year after slipping last year.
Boeing expects full-year earnings in 2017 to range between Us$9.10 and $9.30 per share, about in line with analysts’ forecast of $9.25 per share. The company’s revenue prediction fell short of Wall Street targets, however.
Boeing and its European rival Airbus have boomed in recent years from global economic growth, better profitably among major world airlines and a rise in travel in developing markets, especially Asia, all of which have raised demand for jets. Jet fuel prices spiked twice in the past decade, creating a rush for more fuel-efficient planes. And low interest rates made planes more affordable.
Both big plane makers have order backlogs that will last for years. However, they are likely to face more competition in the next few years for sales of their workhorse models, the Boeing 737 and Airbus A320. Canada’s Bombardier and Russia, Japan and China are in various stages of delivering similar-sized, single-aisle jetliners.
Boeing’s government business could also come under increasing cost pressure. Boeing predicted that 2017 revenue from its defence and space business could fall by up to 5 per cent, including a drop in sales of military jets.
Boeing said on Wednesday that net income in the fourth quarter was $1.63 billion, up 59 per cent from a year earlier. Excluding certain pension expenses, the company said it earned $2.47 per share from its core businesses.
That surpassed Wall Street expectations. The average estimate of 18 analysts surveyed by FactSet and 10 by Zacks Investment Research was $2.34 per share.
Revenue fell 1 per cent to $23.29bn, which was better than the FactSet forecast of $23.13bn but below the Zacks average of $23.45bn.
For 2017, Boeing predicted that revenue will be between $90.5bn and $92.5bn with declines expected in both the commercial and defense sides of the business. The FactSet analysts expect $92.96bn.
Boeing expects to deliver 760 to 765 commercial aircraft, which would be an increase over the 748 delivered in 2016.
Boeing said it has a backlog of more than 5,700 aircraft with a sticker value of $416bn, although airlines routinely get discounts.
Shares of Boeing have increased 3 per cent since the beginning of the year, while the Standard & Poor’s 500 index has climbed about 2 per cent. The stock has climbed 29 per cent in the past 12 months.
* AP
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