Business

Boeing profit outlook disappoints

Boeing plane Image copyright AFP

The earnings outlook from the US planemaker Boeing has missed forecasts.

In a statement, the company said it expected to make between $8.15 and $8.35 a share with revenue between $93bn (£65bn) and $95bn, lower than forecasts of $9.41 per share from revenue of $97bn.

Shares dropped 9% in early trading in New York.

Boeing said it expects to deliver 740 to 745 planes this year, down from 762 in 2015.

Net income in the fourth quarter fell to $1.03bn from $1.47bn a year earlier.

"Boeing extended its leadership of the aerospace industry in 2015 with record deliveries and revenues in commercial airplanes, and solid sales and healthy margins in our defense and space business," said the president and chief executive Dennis Muilenburg.

And he sounded an upbeat note for the year ahead, despite the weaker forecast.

"With clear strategies and strong positions in our markets, a large and diverse order backlog worth nearly $500bn, and multiple additional production rate increases planned yet this decade, we are well positioned for profitable growth and higher cash flow as we move into our second century in business," Mr Muilenburg said.

The jetliner is celebrating 100 years of existence this year.

Last week the company announced it would halve production of its 747-8 jumbo jet, taking production from 12 to six, due to slowing demand. As a result, it took a charge of $569m.

Richard Aboulafia, from the aerospace consultancy Teal Group, was not surprised by the results.

"Many people seemed to expect the amazing supercycle to continue forever. These results and guidance for 2016 show that we're clearly peaking," he said.

"On the positive side, they've made impressive progress on 787 production costs this quarter. They may even start to make money on a recurring basis this year," he added.

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