Boeing disappoints analysts; misses by 21%, cuts guidance 11%

Posted Jan 28th 2009 9:00AM by Peter Cohan
Filed under: Earnings Reports, Boeing Co (BA)

Boeing (NYSE: BA) lost money and its sales plunged in the fourth quarter. Its stock is down in pre-market. It looks like things are going to get worse for Boeing before they get better.

How bad was Boeing's fourth quarter? It lost $56 million, or 8 cents a share, compared with net income of $1.03 billion, or $1.36 a share, in 2007. These charges were significant. It took a $1.09 per share charge related to the 58-day strike last year of its 27,000 machinists. It also took charges of 61 cents per share and 9 cents per share for its 747 program -- which has been set back by design changes and lack of engineering resources -- and legal reserve. The scariest thing of all, though, is that its sales plunged 27% to $12.7 billion as aircraft deliveries for the period fell to 50, down from 112 in the same period last year.

Boeing disappointed analysts on its results and outlook. That's because excluding costs related to two delayed 747 programs and litigation, Boeing's EPS of 62 cents was 16 cents below the average estimate of 78 cents. And Boeing also disappointed on its outlook. Instead of the $5.70 average estimate, Boeing now thinks its profit may range between $5.05 and $5.35 a share in 2009.

Its profit will be hurt by charges related to the dismissal of 4,500 workers, but the biggest concern is how much sales will fall this year and next. In 2009 Boeing foresees commercial deliveries between 480 and 485 planes. But in light of its production challenges with the 787 and the possibility of order cancellations, it's not clear whether Boeing can meet that target.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College. Portfolio recently published his eighth book, You Can't Order Change: Lessons From Jim McNerney's Turnaround at Boeing. He has no financial interest in Boeing securities.

Tags: ba, boeing, inthenews

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Reader Comments (Page 1 of 1)

1-28-2009 @ 3:38PM

Jim Warner said...

This is the real boeing a company with poor management, fantastic skilled employees with a great product. I have not seen any evidence of any management at this company better than mediocre toward poor with a very patient customer. I hope american companies can do better.

1-28-2009 @ 3:43PM

cwdloneranger said...

THE BOEING COMPANY DUMPS A TURD ON THEIR NON-UNION EMPLOYEES TODAY, GIVING THEM 6 DAYS OF EIP---AFTER GIVING THE HOURLY WORKERS A 40 PLUS DAY PAID VACATION, BY GIVING THEM A SIGNING BONUS, THE HOURLY EMPLOYEE SCREWED THEIR IN HOUSE BRETHREN WITH THIS STRIKE....DO THE NON-UNION GET A 40 PLUS DAY PAID VACATION THIS NEXT YEAR??? i DOUBT THEY WILLL