Boeing reports 50% profit cut in 2009

Washington DC
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Boeing today announced that profits dropped by half in 2009 and warned that sales are expected to decline in 2010.

Overall sales for Boeing's commercial and defence businesses in 2009 grew by 12% last year to $68.3 billion, improving on 2008 results that were marred by a labour strike and a $1 billion charge on the 747-8 development programme.

Although sales grew, Boeing's operating margins slipped by 3.4 points, lowering net income from $2.7 billion in 2008 to $1.3 billion last year.

Boeing attributes the decline in profitability to previously announced delays on the 787 and 747-8 programmes, as well as higher costs on the 737 airborne early warning and control programme.

Next year, Boeing expects to decline from $68.3 billion to between $64 and $66 billion. The outlook includes slashing deliveries of commercial airliners to between 460 and 465 aircraft. Production rate changes on the 777 and reductions on Boeing's army modernization and missile defence programmes should also combine to lower revenues, Boeing says.

Jim McNerney, Boeing chairman, president and CEO, acknowledged "significant" challenges ahead, but insists Boeing has "the people and the resources we need to be successful".

In the fourth quarter, Boeing also posted a $1.2 billion profit on $18 billion revenues, which were both dramatically higher compared to 2008, which saw both the strike and the 747-8 charge.