Boeing profit drops on production cuts
Boeing Co., the world’s second-largest plane maker, said Wednesday its first-quarter profit dropped by half, hurt by production cuts as airlines postpone deliveries of new planes. It also forecast lower earnings for the year and reduced aircraft prices.
Demand for the Chicago-based company’s jetliners has tumbled as the recession dampens demand for air travel and air cargo services. Airlines have grounded planes as fewer people fly, and tighter credit markets have made it more difficult for potential buyers to obtain financing for new aircraft.
Boeing said it plans to slash spending and restructure parts of its business as the global economic downturn presents “unprecedented challenges.” In January, the company announced plans to cut a total of 10,000 jobs after reporting a surprise loss for the fourth quarter.
In its latest quarter, Boeing earned $610 million, or 86 cents per share, compared with $1.21 billion, or $1.62 per share, during the same period last year.
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Boeing Reports First-Quarter Earnings
- First-quarter net income was $0.6 billion with earnings per share of $0.86 which includes the previously announced $0.38 per share reduction from revised twin-aisle commercial airplane production rates and lower price escalation forecasts
- Revenue rose 3 percent to $16.5 billion on higher commercial airplane deliveries and higher volume in defense
- Operating cash flow was $0.2 billion
- Backlog at $339 billion — nearly five times current annual revenues
- 2009 earnings outlook reduced to reflect changes in commercial market; outlook for Integrated Defense Systems is reaffirmed on solid execution