Boeing benefits from faster airplane deliveries
Boeing is cranking out planes faster, and it's paying off.
The big U.S. aerospace company is on track to meet delivery targets for the year, and on Wednesday raised its profit guidance and reported a better-than-expected profit for the third quarter.
Boeing has been speeding up production, aiming to get some of its newest planes out the door faster. Its new 787 is getting the most scrutiny because it was three years late when it began hauling passengers last year.
Much of a new plane is paid for at delivery, so faster deliveries mean better cash flow. Boeing's revenue from commercial planes jumped 28 percent to $12.19 billion in the most recent quarter.
Boeing said on Wednesday that it will hit its delivery targets — 585 to 600 commercial planes this year, up from 477 last year. That includes 70 to 85 of a mix of 787s and 747-8s, with about half being 787s. This week Boeing said it has boosted production of its profitable, long-haul 777 to 8.3 per month.
Delivering 787s has proven to be tougher than Boeing expected. Dozens stacked up near its factory in Everett, Wash., needing fixes and modifications to get them ready for customers. The biggest parts of the 787 are made from composite fiber instead of the aluminum used in other Boeing planes, so there has been a learning curve on the factory floor.
"You'll start to see the cash engine picking up steam, and you've seen that this quarter, and we do expect that to continue going forward as we continue to grow and focus on productivity," Chief Financial Officer Greg Smith said on a conference call.
Boeing said half of its fourth-quarter 787 deliveries will come from the rework operation, with the other half coming from the assembly lines.