Boeing outlook sinks stock despite solid 4Q profit

Published on NewsOK Modified: January 29, 2014 at 2:49 pm •  Published: January 29, 2014
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Boeing is building airplanes faster, but Wall Street wants it to build profits faster, too.

Boeing Co. shares dropped more than 5 percent on Wednesday after it said this year's profit and revenue would grow less than analysts had been expecting.

There are a number of reasons. Boeing's defense business is slowing down as governments dial back spending. Some planes slated for delivery in early 2014 were instead delivered late last year — that helped boost Boeing's fourth-quarter profit, but will take away from this year's results. And deliveries of its new 787 are a mixed bag, financially. They bring in cash, but hurt profit margins as Boeing accounts for the money it spent developing the plane.

Boeing predicted 2014 revenue of $87.5 billion to $90.5 billion — at least $2 billion less than expected by analysts surveyed by FactSet.

Orders from airlines around the world have pushed both Boeing and Airbus to build more planes than ever before. Some airlines are buying because newer planes are more fuel efficient, and others — especially in Asia and Latin America — are buying planes because more people can afford to fly.

Boeing has sped production of both its workhorse 737, as well as its new 787. It expects to deliver 110 787s this year, up from 65 last year. Last week Boeing began building 787s at a rate of 10 per month. CEO Jim McNerney said that fewer customers than usual are asking to delay deliveries, "while requests to accelerate deliveries continue at a steady and quite frankly encouraging rate."

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