A DROP IN deliveries, added to high levels of research-and-development (R&D) funding, hit Boeing's first-quarter net earnings, which fell by 38%, compared with 1994, to $181 million.
A total of 59 aircraft were delivered, compared to 82 a year earlier, when deliveries," ...substantially exceeded the nominal production rate quantity during that period due to the timing of customer delivery requirements," says Boeing.
R&D expenses totaled $404 million for the quarter and, although these were 4% lower than in 1994, actually accounted for a larger percentage of overall sales. Boeing expects R&D costs to total around $1.5 billion for 1995, compared to $1.7 billion for each of the last two years.
Giving a warning about slightly reduced sales for the remainder of the year, Boeing says that total turnover for 1995 is "...currently projected to be in the $20-21 billion range, compared with approximately $22 billion in 1994." The company's recently announced special employee-retirement plan is also expected to have a one-time impact on earnings in the second quarter. "While the number of employees accepting the retirement incentive offer will not be known until June, an acceptance rate of approximately one-half of the eligible employees would result in a one-time pre-tax earnings charge of $350 to $400 million," says the company.
Boeing took orders for 74 airliners in the quarter, including 35 737-600s for Scandinavian Airlines System. Total orders for the next-generation 737-600/700/800 now stand at 142 aircraft from seven customers.
On the military and space side of the business, the company "defined" a $5.6 billion contract with NASA for International Space Station the Alpha. The critical-design review of the F-22 fighter (being built with Lockheed Martin) was also successfully achieved. Formal contract award for 14 Chinook helicopters, recently ordered by the UK, is also expected to be made in June.
Boeing adds that 239 airliner deliveries are expected for the full year in 1995.
Source: Flight International
