Boeing revenue dip linked to strike
By Eric Fleischauer
DAILY Business Writer
firstname.lastname@example.org · 340-2435
Boeing Co. said the ongoing strike by its Integrated Defense Systems employees contributed to a $700 million shortfall in revenue expectations for the year, a slight shadow in an otherwise bright conference call Wednesday.
"Revenue came in about $700 million below previous guidance for the year," said Chief Financial Officer James Bell. "This was due to an ongoing strike at our launch business and lower revenues in the IDS proprietary programs. With respect to that strike, the workers are voting on a new contract today, and we are hopeful that they will ratify it. Despite these events, Boeing delivered strong bottom-line performance and outstanding cash flow."
Boeing said its fourth-quarter earnings more than doubled, with its commercial airplane division posting strong gains. The company also raised its profit outlook for 2006, citing better operating performance.
Boeing's fourth-quarter net income rose to $460 million, or 58 cents per share, up from $186 million, or 23 cents per share a year earlier. Analysts were expecting 44 cents a share.
Bell said the increased earnings forecast for 2006 is in part due to expectations for the United Launch Alliance, a proposed joint venture with Lockheed Martin Corp.
The ULA would consolidate Lockheed and Boeing's satellite-launch production facilities in Decatur, a move that would add hundreds of jobs in Decatur. The two companies are awaiting Pentagon and Federal Trade Commission approval for the venture.
Bell said Boeing expects $1 billion in 2006 revenue from ULA.
Boeing and Lockheed announced the proposal in early 2005 and predicted it would clear federal regulatory approval that calendar year. More recently they have not pegged a date for the venture to begin.
"I don't know that it will happen this quarter, but I think it will happen," Bell said. "It's supported both by us and Lockheed, and I think we're answering the questions that the Department of Defense and others that are reviewing that transaction have, so we just need to hang in there and keep working it. I think it will happen, but maybe not this quarter."
Companywide, net income increased to $460 million, or 58 cents a share, from $186 million, or 23 cents, a year earlier. Sales rose 6.8 percent to $14.2 billion. The company raised its profit forecasts for 2006 and 2007 and said it would deliver more planes.
The company said it expects to deliver between 440 and 445 commercial aircraft in 2007, up from this year's forecast of 395 airliners.
Boeing announced a record $70 billion cash flow for 2005.
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