BOEING'S COMMERCIAL aircraft business emerged from a tough 1995 with profits down by more than one-quarter as airliner deliveries continued to slide, a situation worsened by the ten-week machinists' strike.
It delivered only 206 airliners over the year - the lowest for a decade - to record nearly $3 billion less in revenues than in 1994. Boeing says that production-rate rises are due to take output back to 270 in 1996. The value of the backlog grew to $72.3 billion by the end of the year.
Operating profits for the commercial aircraft sector slumped, from more than $1 billion to $743 million. On top of this, Boeing also made a $600 million charge for early retirements, making the profit fall worse.
The group's overall results appear largely unscathed by the decline. The space sector showed a steady rise in sales and profits, while the group's research and development (R&D) spending fell by $400 million to $1.3 billion, and is due to stay at this level throughout 1996.
Disregarding the retirement provision, group net profits were down by 8.5%, at $783 million. Including the provision, profits were cut to $393 million, with tax benefits offsetting the full impact. Boeing says that it also received a $90 million federal tax credit for R&D, largely for the 777.
Source: Flight International
