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Boeing focuses on 787 fix; 4Q profit tops estimate

January 31, 2013
By JOSHUA FREED , THE ASSOCIATED PRESS

Boeing Co. said Wednesday that its top priority this year is fixing the battery problems that grounded its 787.

The company made the pledge while reporting a fourth-quarter profit that topped Wall Street estimates, as rising profits from commercial jets offset a smaller profit from defense work.

The 50 787s in service were grounded two weeks ago by global aviation regulators following two incidents involving the plane's lithium-ion batteries, including a fire on a plane parked in Boston. On Wednesday, Jim McNerney, Boeing's chief executive, said the company believes "good progress is being made" in narrowing down the possible causes. Still, Boeing is not making any predictions about how long the grounding will last and federal officials have said the investigation of the battery problems is still in the early stages.

Article Photos

AP PHOTO
In this Jan. 18, file photo, an All Nippon Airways' Boeing 787 'the Dreamliner' parks on the tarmac as a Japan Airlines' Boeing 767 airplane takes off at Haneda Airport in Tokyo. ANA and JAL said they replaced lithium-ion batteries in their Boeing 787 Dreamliners on multiple occasions before a battery overheating incident led to the worldwide grounding of the jets.

Earlier, U.S. aviation officials said they have asked Boeing for a full operating history of the batteries on the 787s. Japan's All Nippon Airways confirmed that it had replaced batteries on its 787 aircraft 10 times because they didn't charge properly or connections with electrical systems failed. Japan Airlines also said it had replaced 787 batteries. Between them, the two airlines operate 24 787s.

In a statement, Boeing said that it has not "seen 787 battery replacements occurring as a result of safety concerns."

Boeing is still building 787s even though deliveries are halted. It still aims to deliver at least 60 of the planes this year, and it's on track to speed up production from five per month now to 10 per month by the end of the year, McNerney said on a conference call.

Boeing said it expects to deliver 635 to 645 commercial jets this year. That's up from 601 deliveries in 2012, when Boeing delivered 46 787s and topped European rival Airbus for the first time since 2003. Airbus expects to deliver more than 600 planes this year.

Boeing earned $978 million in the latest quarter, or $1.28 per share. That was down 30 percent from a profit of $1.39 billion, or $1.84 per share, a year earlier, which included a big tax benefit of 52 cents per share.

The profit topped the $1.19 per share expected by analysts surveyed by FactSet.

Revenue rose 14 percent to $22.3 billion, matching analyst estimates.

Boeing Co. predicted 2013 earnings of $5 to $5.20 per share, with revenue of $82 billion to $85 billion. The outlook assumes "no significant financial impact" from the 787 being out of service.

 
 

 

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