- The Washington Times - Thursday, January 24, 2002

CHICAGO (AP) Boeing Co. yesterday said fourth-quarter profits tumbled 79 percent, buffeted by the downturn in aviation after the September 11 attacks.
The world's biggest airplane manufacturer managed to boost revenues by 7 percent over the previous year's quarter, but projected them to fall for all of 2002 and 2003 as the industry's decline takes full effect.
Net earnings were $100 million, or 12 cents a share, down from $481 million, or 55 cents a share, a year earlier. The company took $622 million in charges, largely related to the attacks, including moves to lay off as many as 30,000 of its 95,000 employees as a result of weakened demand.
Revenues climbed to $15.7 billion from $14.7 billion in the same period of 2000.
Excluding the charges, earnings were 90 cents a share, matching the estimate of Wall Street analysts surveyed by Thomson Financial/First Call.
Investors sent Boeing shares down 39 cents to $39.39 yesterday on the New York Stock Exchange. The stock is down from almost $70 last May, but up sharply since hitting a six-year low of $27.61 some 10 days after the attacks.
"We are in a challenging period for commercial aircraft, but all of our businesses are performing well and our corporate structure provides real opportunity," Chairman and CEO Phil Condit said on a conference call, emphasizing the strength of Boeing's defense, space and finance businesses.
Analyst Paul Nisbet of JSA Research said the company isn't yet diversified enough to avoid a big hit from aviation's decline, however.
"This will be their toughest year, just downsizing and trying to keep up the earnings efficiency that they have had while they downsize," he said.
"Once they've downsized, things will stabilize and they'll probably make more money in 2003 on less revenues although they're indicating a pretty flat revenue picture in 2003, too."
Boeing's commercial-aircraft division enjoyed a 7 percent rise in revenue, to $9.34 billion from $8.66 billion a year earlier with its share of company revenues holding steady at 59 percent. But its operating profit sank to $82 million from $856 million in the same quarter of 2000.
Revenue from the military-aircraft and missile-systems unit climbed to $3.45 billion from $3.16 billion, while the space and communications business had revenue of $2.91 billion, down slightly from $2.97 billion. Its commercial-financing division saw revenues rise 10 percent to $247 million.
For the full year, net earnings were $2.83 billion, or $3.41 a share, up from $2.13 billion, or $2.44 a share, in 2000. Revenues rose 13 percent to $58.2 billion from $51.3 billion.
Boeing lowered its projection for 2002 revenues by $1 billion to $54 billion in 2002 and pegged 2003 revenues to fall further to $52 billion.
The company said it expects to deliver about 380 airplanes in 2002, down from 527 last year, and from 275 to 300 in 2003. But it acknowledged that the outlook remains uncertain, amid industry skepticism that those numbers will hold.
The immediate concern is 2003 production, which Mr. Condit acknowledged will be "a down year" even though the company already has sold about 75 percent roughly 200 planes of the total it projects to deliver next year.
"We do not have great insights today about when that might start back up," he said. "The first thing is that passenger traffic has got to come back. The second thing is that airlines have got to earn money. Then there's a question about how many airplanes are in storage."
Company officials indicated, however, that there are no plans for additional layoffs beyond the as many as 30,000 they warned of last fall.

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