Defense/Aerospace Industries

[DewDiligence]

Boeing Returns to Profitability, Gives Cautious Outlook

[Sometimes I wonder if BA has its own proprietary definition of profitability.]

http://online.wsj.com/article/SB10001424052748704094304575028821023765514.html

›By JOAN E. SOLSMAN
JANUARY 27, 2010, 7:52 A.M. ET

Boeing Co. swung to a fourth-quarter profit on effects from a machinists' strike last year while the aircraft maker and defense contractor's 2010 guidance fell short of analysts' estimates.

The company projects it will earn $3.70 to $4 a share this year, compared with analysts' average prediction of $4.26, because of output declines in 777 airliner and the reduced scope of Army modernization and missile-defense programs. [Blah, blah, blah.]

Shares fell 1.2% premarket to $57.

Boeing, which is the country's No. 2 government defense contractor behind Lockheed Martin Corp., has leaned on strength in that business to offset weakness from commercial airlines, which have been putting new purchases on hold as they reduce capacity. Commercial-aircraft earnings have also been weighed down by charges from the oft-delayed 787 and 747-8 programs, although the 787 Dreamliner finally made its first flight in December.

But its full-year outlook reflected how belt tightening at the Pentagon means it can't rely of defense-unit strength perpetually. Chairman and Chief Executive Jim McNerney said the company plans to "further reposition our defense, space and security business."

Boeing posted a profit of $1.27 billion, or $1.75 a share, compared with a year-earlier loss of $86 million, or 12 cents a share. The previous period included 70 cents in charges mostly related to a machinists' strike.

Revenue increased 42% to $17.94 billion, as the year-earlier figure was also hampered by the strike.

A survey of analysts by Thomson Reuters predicted a $1.36 profit on $17.57 billion in revenue.‹