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Boeing Posts Loss On 4th Qtr/Year End Earnings  
User currently offlineArabAirX From , joined Dec 1969, posts, RR:
Posted (5 years 7 months 3 weeks 6 days 18 hours ago) and read 2822 times:

http://www.boeing.com/news/releases/2009/q1/090128a_nr.html

CHICAGO, Jan. 28, 2009 – The Boeing Company’s [NYSE: BA] fourth-quarter net
income declined to a loss of $56 million, or $0.08 per share, reflecting the now-settled
machinists' strike (EPS impact estimated at $1.09 per share), a charge related to the 747
($0.61 per share) and a litigation-related reserve ($0.09 per share).

23 replies: All unread, jump to last
 
User currently offlineScouseflyer From United Kingdom, joined Apr 2006, 3390 posts, RR: 9
Reply 1, posted (5 years 7 months 3 weeks 6 days 18 hours ago) and read 2803 times:

Was anything said about the possible first flight of the 787?

User currently offlineArabAirX From , joined Dec 1969, posts, RR:
Reply 2, posted (5 years 7 months 3 weeks 6 days 17 hours ago) and read 2774 times:

Same as before, second quarter of 2009.

User currently offlineKappel From Suriname, joined Jul 2005, 3533 posts, RR: 17
Reply 3, posted (5 years 7 months 3 weeks 6 days 16 hours ago) and read 2695 times:



Quoting ArabAirX (Thread starter):
CHICAGO, Jan. 28, 2009 – The Boeing Company’s [NYSE: BA] fourth-quarter net
income declined to a loss of $56 million, or $0.08 per share, reflecting the now-settled
machinists' strike (EPS impact estimated at $1.09 per share), a charge related to the 747
($0.61 per share) and a litigation-related reserve ($0.09 per share).

Any mention of costs relating to the 787 delays? That has to cost them a lot too, in lost revenue, extra development costs and compensation payments.



L1011,733,734,73G,738,743,744,752,763,772,77W,DC855,DC863,DC930,DC950,MD11,MD88,306,319,320,321,343,346,ARJ85,CR7,E195
User currently offlineStitch From United States of America, joined Jul 2005, 31003 posts, RR: 86
Reply 4, posted (5 years 7 months 3 weeks 6 days 16 hours ago) and read 2645 times:
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Boeing also recorded a total of 15 cancellations for the 787. The backlog now stands at 895 (down from 910), but who (or whom) canceled was not noted.

User currently offlineLumberton From United States of America, joined Jul 2005, 4708 posts, RR: 20
Reply 5, posted (5 years 7 months 3 weeks 6 days 16 hours ago) and read 2642 times:

The loss is really impacting the stock at market open. Its only up 2%.  Big grin


"When all is said and done, more will be said than done".
User currently offlineStitch From United States of America, joined Jul 2005, 31003 posts, RR: 86
Reply 6, posted (5 years 7 months 3 weeks 6 days 16 hours ago) and read 2622 times:
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Quoting Lumberton (Reply 5):
The loss is really impacting the stock at market open. Its only up 2%.  Big grin

I expect these numbers are not as bad as the Street was expecting. They reward "good news" even "good news" means "not as bad news as we expected".  Wink


User currently offlineWINGS From Portugal, joined May 2005, 2831 posts, RR: 68
Reply 7, posted (5 years 7 months 3 weeks 6 days 16 hours ago) and read 2594 times:



Quoting Stitch (Reply 4):
Boeing also recorded a total of 15 cancellations for the 787. The backlog now stands at 895 (down from 910), but who (or whom) canceled was not noted.

The following airlines/companies have 15 787's on order.

Air China
China Eastern
Dubai Aerospace Enterprise
S7 Airlines
Virgin Atlantic
UFO

From the above China Eastern was expected to cancel orders from both Airbus and Boeing. The currently only have A320's on order with Airbus. They do not have any A330's on order like it was rumored last week. I reserve some doubts about being China Eastern as they were expected to get their first order in 2009, but the article specifically mentions late next decade.

I would not also be surprised to see Virgin Atlantic abandon the 787. The A332/A333 would fit their needs extremely well. They currently have 6 A346's deferred, which can easily be converted to the A330 series.

S7 is also a prime candidate. Considering that some major (LCC) have opted for the A333 in recent times, I can easily seem them also going down this path. They were originally expected to start getting the 787 in 2014.

Regards,
Wings



Aviation Is A Passion.
User currently offlineMCIGuy From United States of America, joined Mar 2006, 1936 posts, RR: 0
Reply 8, posted (5 years 7 months 3 weeks 6 days 16 hours ago) and read 2560 times:

I'd rate B(c)A as a definite buy, if you can afford it!  Smile


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User currently offlineEcb747 From Norway, joined Apr 2006, 37 posts, RR: 0
Reply 9, posted (5 years 7 months 3 weeks 6 days 15 hours ago) and read 2465 times:

Due to the strike Boeing lost $6,4B. That's a BIG hit!! Also, 15 cancellations now and more to come, so losing more the. But with some cancellations, some new customers or customers late in the queue should get theirs sooner if the want, so maybe not all negative.

User currently offlineStitch From United States of America, joined Jul 2005, 31003 posts, RR: 86
Reply 10, posted (5 years 7 months 3 weeks 6 days 15 hours ago) and read 2462 times:
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Quoting WINGS (Reply 7):
The following airlines/companies have 15 787's on order.

As I noted in the other thread, if VS is looking for LON to Eastern North America, the A333 would work. LON to Western North America and Asia would not be possible with an A333 (at a full payload) so that would mean an A332, which would also result in a smaller payload due to smaller size.

S7 could order some A330-200s in place of the 787 to expand earlier (the current delivery date for their 787-8s is 2014).

I'm confident the UFO didn't cancel, due to their delivery dates, but I need to see Boeing's next order report to confirm that.


User currently offlineStitch From United States of America, joined Jul 2005, 31003 posts, RR: 86
Reply 11, posted (5 years 7 months 3 weeks 6 days 13 hours ago) and read 2341 times:
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James Wallace of the Seattle PI says it's S7 that canceled due to economic uncertainty and not an issue with delivery times.

As such, they likely have decided to not expand operations outside the CIS, so they don't need new long-range aircraft from either manufacturer. I assume they are still committed to taking their remaining 767-300ER and 737NGs to support domestic operations.


User currently offline707lvr From United States of America, joined Jun 2004, 585 posts, RR: 2
Reply 12, posted (5 years 7 months 3 weeks 6 days 12 hours ago) and read 2286 times:

Strange to see all the coverage on the QUARTER when it's the YEAR that really matters.

User currently offlineStitch From United States of America, joined Jul 2005, 31003 posts, RR: 86
Reply 13, posted (5 years 7 months 3 weeks 6 days 12 hours ago) and read 2238 times:
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Quoting 707lvr (Reply 12):
Strange to see all the coverage on the QUARTER when it's the YEAR that really matters.

They released the results for the Fiscal Year, as well. The strike, as expected, did a number on them as did large stock buyback and dividend increases (though the last two will make stockholders happy).

Total revenues down $5.5 billion USD (-8%)

Total operating income down $1.8 billion USD (-32%)

Earnings Per Share down $1.57 (-30%)

Operating Cash Flow for 2008 was negative $400 million versus positive $9.6 billion in 2007 due to the strike, a $3 billion stock buyback, a $1 billion enhancement in dividend payouts, and program costs on the 787, 747-8 and 777F.

This reduced Boeing cash on hand from $7.2 billion to $3.6 billion, but it also reduced their debt levels by $300 million and they continue to hold top-level credit grades on that debt.

The strike wiped out all operating margins for the fourth quarter in BCA. No word on how they were for the year. Q4 IDS margins fell from 11.7% to 11.0%.

Let the  flamed  begin, I suppose. I'll leave you all to it and peruse other threads.

[Edited 2009-01-28 11:10:02]

User currently offlineSsublyme From United States of America, joined Dec 2008, 517 posts, RR: 0
Reply 14, posted (5 years 7 months 3 weeks 6 days 11 hours ago) and read 2211 times:



Quoting Stitch (Reply 4):
Boeing also recorded a total of 15 cancellations for the 787. The backlog now stands at 895 (down from 910), but who (or whom) canceled was not noted.

I opened a thread on this subject earlier today, but it looks like it was deleted.


User currently offlineAstuteman From United Kingdom, joined Jan 2005, 10039 posts, RR: 96
Reply 15, posted (5 years 7 months 3 weeks 6 days 10 hours ago) and read 2139 times:
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Quoting Stitch (Reply 13):
Let the  flamed  begin, I suppose

Why? You posted a good summary, I thought.

Not my area of expertise, but was a $3Bn stock buy-back sensible at this time, if it reduced net cash to $3.6Bn?

Quoting Stitch (Reply 13):
The strike wiped out all operating margins for the fourth quarter in BCA. No word on how they were for the year. Q4 IDS margins fell from 11.7% to 11.0%.

Table on Page 3:-

Operating Profit for BCA was $1.186Bn in the year, a margin of 4.2% (Down from $3.584Bn and 10.7% in 2007).
"The strike reduced full-year earnings by an estimated $1.8Bn"

Rgds


User currently offlineStitch From United States of America, joined Jul 2005, 31003 posts, RR: 86
Reply 16, posted (5 years 7 months 3 weeks 6 days 10 hours ago) and read 2108 times:
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Quoting Astuteman (Reply 15):
Why? You posted a good summary, I thought.

It's part of my secret plan to nip it in the bud before it starts.  Wink  crossfingers 


Quoting Astuteman (Reply 15):
Not my area of expertise, but was a $3Bn stock buy-back sensible at this time, if it reduced net cash to $3.6Bn?

Well it is a sign that Boeing is evidently not worried about funding to complete the 787 and 747-8 programs and bring them to production.

US corporations sitting on large bank balances tend to draw the ire of their shareholders. So the most common way to keep them happy is to boost the stock price by reducing the shares through a stock buyback and/or increasing the dividend paid on said shares.

Quoting Astuteman (Reply 15):
Operating Profit for BCA was $1.186Bn in the year, a margin of 4.2% (Down from $3.584Bn and 10.7% in 2007).

"The strike reduced full-year earnings by an estimated $1.8Bn"

So chances are BCA margins without a strike would have been 10% or so, which is within original projections.

[Edited 2009-01-28 13:02:19]

User currently offlineAstuteman From United Kingdom, joined Jan 2005, 10039 posts, RR: 96
Reply 17, posted (5 years 7 months 3 weeks 6 days 10 hours ago) and read 2088 times:
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Quoting Stitch (Reply 16):
So chances are BCA margins without a strike would have been 10% or so, which is within original projections.

Looks that way  thumbsup 

I'm going to be interested to see how they play the 787 delays.

EADS (Airbus) appeared to distil all of the bad news out in a c. 2 year splurge, obliterating profits for those 2 years, but clearing the decks (evidence this year's profits bounce-back), and delaying the payment of large sums of corporation tax (perhaps contributing to the very substantial cash "bounce-back" over the last 2 years also)

To me, it seemed like a very sound fiscal response to the problem.

I note Boeing forecast 10% margins again for BCA in 2009.
We shall have to wait and see what they intend, I guess.

Rgds


User currently offlineStitch From United States of America, joined Jul 2005, 31003 posts, RR: 86
Reply 18, posted (5 years 7 months 3 weeks 6 days 9 hours ago) and read 2035 times:
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I hope Boeing does the same and just "front-loads" them all in, but the impact on the stock price that might have could prevent it lest a shareholder revolt occur.

As for margins, all 2009 deliveries were likely ordered during the "good times" so I can see why Boeing expects margins to remain strong. There will be higher costs (materials and labor) which will eat in to it a bit, but likely not by a great amount.


User currently offlineRheinbote From Germany, joined May 2006, 1968 posts, RR: 52
Reply 19, posted (5 years 7 months 3 weeks 6 days 9 hours ago) and read 2002 times:

My picks are:

- US$ 685 million loss charge on 747-8 program due to a major design fault. Wing loads were miscalculated, which required an extensive redesign that spread into the fuselage with further repercussions throughout the production and supply chain.
- McNerney expects 787 LN1-LN6 to be in the air within 4 months of first flight, which is still expected to happen in the second quarter.
- McNerney says 737 is overbooked by 15% so deferrals and cancellations will be easily absorbed.

A propos...the analysts and journos that were hooked into the conference call were complete duds. They were slap happy to delve into the nitty-gritties of financial accounting rather than to poke McNerney and Bell for some program details. Also, it looks to me like there was a gag order on the Airbus dossier. What a farce.


User currently offlineStitch From United States of America, joined Jul 2005, 31003 posts, RR: 86
Reply 20, posted (5 years 7 months 3 weeks 6 days 8 hours ago) and read 1951 times:
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Quoting Rheinbote (Reply 19):
A propos...the analysts and journos that were hooked into the conference call were complete duds. They were slap happy to delve into the nitty-gritties of financial accounting rather than to poke McNerney and Bell for some program details.

In past Investor's Calls they have focused their questions on 787 program slips, but most of the time never got a straight answer or when they did, something else would come up later and cause a new slippage that they'd then ask about at the next Investor Call.

At this point, maybe they just don't care anymore about when the 787 will fly, but instead are focusing on how it not flying during that quarter is affecting the financial results. That's about how I view the situation now since I am looking to buy Boeing stock again.


User currently offlineBeyondBristol From United Kingdom, joined Jan 2009, 60 posts, RR: 0
Reply 21, posted (5 years 7 months 3 weeks 6 days 8 hours ago) and read 1951 times:



Quoting WINGS (Reply 7):
S7 is also a prime candidate. Considering that some major (LCC) have opted for the A333 in recent times, I can easily seem them also going down this path. They were originally expected to start getting the 787 in 2014.



Quoting Stitch (Reply 11):
James Wallace of the Seattle PI says it's S7 that canceled due to economic uncertainty and not an issue with delivery times.

Just to add, the Financial Times is also reporting it will be S7, though they haven't quoted a source.

http://www.ft.com/cms/s/0/1baad658-ed39-11dd-88f3-0000779fd2ac.html



I'll admit it...I'm a BA & VS cheerleader.
User currently offlineTdscanuck From Canada, joined Jan 2006, 12709 posts, RR: 79
Reply 22, posted (5 years 7 months 3 weeks 6 days 6 hours ago) and read 1893 times:



Quoting Astuteman (Reply 15):
Not my area of expertise, but was a $3Bn stock buy-back sensible at this time, if it reduced net cash to $3.6Bn?

Provided that $3.6B is enough to see them through until 787 revenue starts coming in, it was probably a good move. Stich is absolutely right that the financial community leans hard on companies with large cash balances to do something with it. If Boeing is confident that they can recover (which I sincerely hope they are), buying cheap stock now provides multiple benefits:
-Investors get happy (it boosts the stock price higher than it otherwise would be)
-Financial types get happy (lower cash balance)
-Boeing get a bunch of stock for cheap that will be worth a lot more when they recover, thereby providing the opportunity to sell stock later for more money and gain cash

Even if the stock price stays relatively stable, they could convert the stock back into cash by putting it back out on the market so it's not like it's cash that's gone forever.

The only thing that would make it a disaster would be if the stock dropped a lot more than it already has, then didn't recover before Boeing ran out of operating cash. Presumably, they view that as unlikely.

Tom.


User currently offlineAstuteman From United Kingdom, joined Jan 2005, 10039 posts, RR: 96
Reply 23, posted (5 years 7 months 3 weeks 6 days 5 hours ago) and read 1855 times:
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Quoting Tdscanuck (Reply 22):
Stich is absolutely right that the financial community leans hard on companies with large cash balances to do something with it.

In more "normal" times, I would agree completely.

I would have thought that right now there were plenty of good arguments for having a strong cash reserve.
No matter. They know more about their situation that I do.

And they are predicting $2Bn positive cashflow next year too (somewhat impressively, given the current economic climate)

Rgds


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