Boeing sees no big impact from 787 woes, profit beats

NEW YORK (Reuters) - Boeing Co posted stronger-than-expected profit on Wednesday as its backlog of orders rose, and said its 2013 forecast assumed no significant impact from the grounding of its 787 Dreamliner jet by regulators.

Shares were up 0.5 percent at 74.10 in early trading.

Aviation safety agencies in the United States and Japan are investigating what caused lithium-ion batteries to burn on two 787 passenger jets earlier this month, prompting regulators to ground the planes worldwide.

Boeing said it is continuing to build the Dreamliner but has halted deliveries, and analysts have raised concerns about the cost of the grounding and for fixing the battery problem on about 125 jets that Boeing has built so far.

"Our first order of business for 2013 is to resolve the battery issue on the 787 and return the airplanes safely to service with our customers," said Boeing Chief Executive Jim McNerney.

Earlier Wednesday, Japan's two biggest airlines said they had repeatedly replaced sub-par lithium-ion batteries on their Dreamliners in the months before the two incidents that led to the 787 groundings. On January 16, the U.S. Federal Aviation Administration ordered U.S. airlines to stop flying 787s, and other regulators around the world quickly followed suit.

The comments from All Nippon Airways Co Ltd, the biggest customer of the 787 to date, and Japan Airlines Co Ltd indicated problems with the battery's reliability long before one caught fire on a JAL 787 at Boston's Logan Airport on January 7, and a second battery was badly charred and melted on an ANA domestic flight a few days later.

That flight was forced to make an emergency landing. The two airlines operate 24 of the 50 787s in service. United Airlines is the only U.S. carrier currently flying the 787.

Boeing declined to comment on the latest failed battery revelations, citing an ongoing investigation by the U.S. National Transportation Safety Board.

But in giving its outlook for 2013, the company said its figures assume "no significant financial impact from the FAA directive."

Ken Herbert, an analyst at Imperial Capital, said it was difficult to estimate the impact from the grounding. "It's too early, and too risky, to say," he said, noting there were numerous grounding-related issues for Boeing and for airlines, and still many unknowns.

The NTSB has not yet established a cause for either of the two battery incidents.

Meanwhile, Boeing said net income fell to $978 million, or $1.28 per share, in the fourth quarter, from $1.39 billion, or $1.84, in the year-ago period, when it posted a special tax gain.

Analysts expected earnings of $1.19 a share.

Herbert said wider profit margins from its commercial airplanes helped the company to beat estimates.

But he was disappointed by its 2013 profit outlook of $5.00 to $5.20 a share, compared with his target of $5.60. The figures include pension charges.

The consensus Wall Street estimate was $5.13 a share for 2013, according to Thomson Reuters I/B/E/S.

Revenue for the quarter rose 14 percent to $22.3 billion.

The company said it booked 394 net aircraft orders in the quarter, and that its total order backlog was nearly 4,400 planes valued at $319 billion, a record tally.

(Reporting by Alwyn Scott; Editing by Jeffrey Benkoe)

Source: http://news.yahoo.com/boeing-profit-drops-sees-no-significant-impact-787-125728755--finance.html

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