GRAHAM WARWICK / WASHINGTON DC
Boeing's business strategy will not change, says new chief executive Harry Stonecipher, after a turbulent year in which Boeing Commercial Airplanes (BCA) delivered "solid" profitability and Integrated Defense Systems (IDS) achieved strong growth. After a $1.1 billion tax refund, net earnings for 2003 were $698 million, compared with $492 million a year earlier.
Despite almost 10% growth in revenues at IDS, total sales fell nearly 7% to $50.5 billion on 100 fewer commercial aircraft deliveries than in 2002. BCA delivered 281 aircraft and will hand over around 285 this year and the same number in 2005. Deliveries for this year "are essentially all sold out", says chief financial officer James Bell, while next year "is over 90% sold out at the 2004 level". A recovery in deliveries is expected in 2006.
BCA's revenues fell 21% last year to $22.4 billion and are expected to slip again to around $20 billion this year before recovering slightly in 2005. Having reached $27.4 billion last year, IDS sales are expected to increase to $29.2-30.6 billion this year and grow another 10% next year. Overall, Boeing expects revenues of $52 billion this year and $55-57 billion in 2005.
Boeing still expects to sign a 100-aircraft US Air Force KC-767 tanker lease/purchase contract this year, says Stonecipher. The company spent $270 million last year, and is burning $90 million a quarter this year, to hold the schedule on the stalled deal. Even if a contract is signed this year, Boeing will see no revenues from USAF tanker deliveries before 2006, he says.
The company is also spending heavily at Connexion by Boeing to equip customer aircraft and prepare for the launch of commercial broadband service with Lufthansa in March. Connexion and Boeing Air Traffic Management lost $449 million last year, slightly more than in 2002.
Source: Flight International