Boeing on Wednesday reported robust earnings for 2007 but said 2008 revenue will take a $500 million hit because its flagship 787 Dreamliner passenger jet is months behind schedule.
The Chicago-based aerospace giant now forecasts 2008 revenue of $67 billion to $68 billion because no 787s will be delivered to customers this year. Earlier this month, Boeing postponed the 787's first flight until June and said the first 787s will not be delivered until sometime in early 2009.
The technologically advanced Dreamliner has logged a record number of early orders — 857 from 56 customers worldwide. It was originally scheduled to make its first flight last year, and deliveries were to begin this year. But delays in deliveries to Boeing of crucial fasteners and problems with the quality of some outsourced work have forced Boeing to twice slow down its schedule.
The twin-aisle 787 will be the first commercial passenger jet with a fuselage made entirely of man-made composite material. Boeing outsourced a record amount of the production work in an effort to speed the manufacturing of the planes.
For 2007, Boeing's net income jumped 84% to a record $4.1 billion, or $5.28 a share. That's up from $2.2 billion, or $2.85 a share, in 2006. Revenue in 2007 totaled $66.4 billion, up 8%. Passenger jet orders for 2007 hit a record of 1,423, up from 1,050 in 2006.
For the fourth quarter, Boeing earned $1 billion, or $1.36 a share, up from $989 million, or $1.29 a share, a year earlier. "Despite some development program challenges, we are a strong company growing stronger," CEO James McNerney said.
He said Boeing, the USA's top exporter, is well-positioned going forward, even if the USA slides into recession. McNerney said Boeing is benefiting from strong government defense spending and strong economic growth outside the USA. Only 11% of Boeing's order backlog in its commercial plane unit is from U.S. airlines, for example. Asia, the Pacific and the Middle East are strong markets for Boeing. Japan's All Nippon Airways said it would spend about $5.7 billion to buy about 60 fuel-efficient planes from Boeing, Reuters reported late Wednesday.
Boeing is bracing for a decision from the Air Force on a roughly $40 billion contract for 179 air-to-air refueling tankers to replace its aging tanker-jet fleet. The decision is expected soon. Boeing and European rival Airbus are bidding to supply the aerial tanker jets used to fuel military aircraft. Boeing has proposed modified 767-200s, while Airbus is partnering with U.S. defense contractor Northrop Grumman (NOC) and proposing modified A330s.