Boeing Co. this morning posted strong third-quarter results based on improved performance of its Puget-Sound-based Commercial Airplanes group.
The company raised its predictions for full-year earnings to a range of $3.80 to $4 a share based on those results and projected fourth-quarter performance. The aerospace company previously had forecast 2010 earnings at $3.50 to $3.80 a share.
The $837 million in third-quarter profits were a sharp reversal from last year's third-quarter loss of $1.56 billion. Those losses were driven by additional research and development and delay costs for the company's oft-postponed 787 and 747-8 new aircraft.
"Our results and revised outlook reflect the continued strong performance of our commercial production and services programs and the ability of our defense businesses to produce solid results in a challenging environment," said Jim McNerney, Boeing's chairman.
Boeing's defense business revenues were off 6 percent and its earnings from operations were off 23 percent from the same quarter last year. Boeing's defense sector has felt a squeeze as the Pentagon and some foreign governments have reined in spending to compensate for domestic spending.
Meanwhile, the commercial airplanes operation showed an 11 percent increase in quarterly revenues and a complete flip-flop in operating earnings from a loss of $2.8 billion last year at this time to a $1 billion profit in this quarter.
The commercial airplanes operation produced double-digit operating margins, 11.6 percent, while defense produced an 8.4 percent operating result.
Commericial activity shows promise, said McNerney, as the company begins delivering both the 787 and the 747-8 next year. Both those planes have experienced multiple delivery delays.
Airliner orders are up substantially this quarter with Boeing winning 257 gross orders in the three months ending Sept. 30. The company now has orders for 3,401 airliners valued at $255 billion.
McNerney gave no definite word on whether the company will produce a re-engined 737 or wait to produce an all-new plane. He hinted, however, that the all-new smaller plane could emerge in 2020 if the company opts for that choice.
In the meantime, he seemed to suggest, the company could embark on improvements to its 777 long-range jet to improve its efficiency versus Airbus's upcoming A-350XWB.
The Boeing chairman said he expects order activity for new aircraft to return to more normal levels as the economy revives. It's unlikely, however, he said, that the company will soon see yearly order levels that set records in the last years of the last decade.