Boeing's stock ticked up Wednesday after the aerospace giant reported record revenues in 2012 and forecast that it would step out from the shadow of its flagship Dreamliner 787 in the coming year.
"For 2013, our first order of business, obviously, is getting the 787 back into operation," Boeing Co. CEO and Chairman Jim McNerney told investors during an earnings call. "Dreamliner 787 production continues as planned, and we remain confident in the future of the program."
Boeing said the problems with the Dreamliner 787 will have "no financial impact" on the company's performance in 2013. Mr. McNerney also said the company has given "no instruction of slowing down."
"It's business as usual, let's keep building airplanes," Mr. McNerney said.
Investors responded positively as shares rose more than 1 percent to close at $74.57.
This is the first piece of good news Boeing has received as of late.
The Dreamliner 787's battery problems have triggered worry over the company's newest airplane model. On Jan. 7, the battery on a Japan Airlines flight caught fire. No one was injured. A little more than week later, regulators grounded all 50 planes, after a second problem forced All Nippon Airways 787 to make an emergency landing in Japan.
Boeing shares took a hit, trading down more than $4, or 5 percent, since the beginning of the year through Tuesday's close. So even a seemingly small 1 percent, or 92 cent, rise in the stock price is a relief for the troubled company.
"We deeply regret the impact this situation is having on our customers," Mr. McNerney said.
Despite Boeing optimism surrounding the Dreamliner 787, the company offered few answers for what went wrong.
"We're making good progress, and we're narrowing down the things that could have gone wrong," Mr. McNerney said.
Assuming Boeing can solve the problems with the Dreamliner 787, he said that model is still popular with customers because of the "game-changing fuel efficiency" it promises.
Boeing also reported record revenues and beat earnings estimates.
Revenue rose to a record $81.7 billion in 2012, up from $68.7 billion in the previous year. In the fourth quarter, revenue of $22.3 billion, up 14 percent from $19.6 billion in the same period a year earlier, also was a company record. That number was on par with analysts' estimates, according to a Thomson Reuters survey.
These record revenues were driven by record sales and a growing backlog of $390 billion in orders, up from $378 billion at the beginning of the quarter. There were $114 billion in orders throughout the year.
But this upward trend could be short-lived. Beyond the Dreamliner 787 crisis, Boeing faces the threat of sequestration, which — if it kicks in as scheduled March 1 — would lead to billions in defense cuts.
That's a concern for Boeing, considering much of its business comes from the defense industry. In 2012, the company's defense division generated $32.6 billion in revenue, including $8.3 billion in the fourth quarter.
Boeing reported net income of $3.9 billion, or $5.11 per share, for the year, which was down 2.9 percent from the previous year. Boeing's fourth quarter earnings also fell to $978 million, or $1.28 per share, a 30 percent decline from $1.39 billion during the same quarter in the previous year. But it beat analysts' estimates of only $1.19 per share. Boeing also introduced a new profit measurement, called core earnings, during the quarter.
Looking forward to 2013, Boeing forecast revenue of $82 billion to $85 billion, and earnings per share of $5 to $5.20, which is on par with analysts estimates of $5.16, according to a Bloomberg survey.
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Tim Devaney is a national reporter who covers business and international trade for The Washington Times. Previously, he worked for the Detroit News, Grand Rapids Press, Portland Press Herald and Bangor Daily News. Tim can be reached at firstname.lastname@example.org.
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