Boeing Profit Gain Beats Estimates

Boeing Co. wrapped up a tough year of aircraft production bottlenecks and lost business with a fourth-quarter profit that beat expectations amid signs that its factories are returning to health.

The world’s largest aerospace company said its fourth-quarter profit rose 50% to $435 million, or 45 cents a share, three cents higher than the average analyst estimate of 42 cents, as strong military fighter sales offset weak margins in the commercial jet business. Revenue climbed 46% to $17.1 billion.

Despite the performance, Boeing’s shares fell, closing down $1 at $35 on the New York Stock Exchange.

“People are not convinced that Boeing is out of the woods yet,” said James Volk, co-director of institutional trading at DA Davidson, who also attributed the move to profit-taking on good news.

Boeing also trimmed expectations for commercial jet deliveries next year to 480 from a forecast of 490 in December, when it said it would cut 20% of its work force to cope with recessions in Asia. Commercial jet output will drop at least 23% next year from 1999’s planned 620. The December warning was the latest in a series for Boeing, which has faced soaring costs and parts shortages as it has struggled to fill a surge in orders.

In conference calls with analysts and reporters, Boeing executives said the company was making progress toward “the upper end” of profit projections during the next two years but said significant improvements in profitability are unlikely before 2001.

Chief Executive and Chairman Philip M. Condit said that the worst seems to be over for the company.

“We have made progress and the current plans reflect that progress, but we still have a ways to go,” Condit said.

For the year, Boeing earned $1.1 billion, or $1.15 a share, compared with a loss of $178 million, or 18 cents, on a 23% rise in revenue to $56.2 billion.

Boeing said it expects sales to rise slightly to $58 billion this year as commercial aircraft deliveries rise to 620 from 559 last year.

Boeing said commercial jets made up 63% of revenue for the year, while military aircraft and missile systems accounted for 23% and space and communications accounted for 12%.

At a Glance

Other aerospace-related earnings, excluding one-time gains and charges unless noted:

* Raytheon Co. said its fourth-quarter profit rose 51% to $369 million, or $1.08 a share, matching estimates, as growth in its electronics unit offset lower profit in engineering. The maker of Patriot missiles and Beech aircraft said sales jumped 36% to $5.44 billion, with a big boost from the company’s December 1997 acquisition of Hughes Defense.

* Textron Inc., the biggest maker of commercial helicopters and mid-size business jets, said its fourth-quarter operating profit rose 19% to $120 million, or 74 cents a share, matching expectations, as sales jumped in most of its businesses. The maker of Cessna aircraft, auto parts and industrial equipment said revenue rose 11% to $2.6 billion.

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