A "solid and clearly improving performance" at Boeing has seen the company post healthy first quarter net profits of $469 million - a better than anticipated result after the aircraft giant's woes last year. Boeing warns, however, that recent stronger prices on commercial jets are not expected to hold for the rest of 1999.
Debby Hopkins, Boeing's new chief financial officer, notes that both commercial aircraft pricing and model mix were "noticeably stronger" in the first quarter than is projected for the rest of the year. A continued focus on cost reduction will be necessary to mitigate the anticipated market pressures, says Hopkins.
But Boeing chairman and chief executive Phil Condit says that production in the factories is "much healthier" and continues to improve. "Out of sequence jobs, parts shortages and over time are all down to reasonable levels," says Condit.
First quarter net profits stood at only $50 million a year ago as production problems mounted, and the near tenfold improvement in the latest figures beat analysts' predictions by almost 20%. But Boeing is remains cautious, stressing that much work needs to be done. It expects to produce a record 620 commercial jets this year and has ramped up 737 New Generation production to 24 a month.
Meanwhile, Bombardier and Embraer posted records in their 1998 full-year results. Bombardier's group revenues hit C$11.5 billion ($7.8 billion) - up 35% over the previous year, while net profits soared by almost as much to reach C$554 million. The group's aerospace division led the way with profits of up by over 40% at C$682 million on revenues of C$6.4 billion.
Its rival, Embraer also saw revenues shoot up 75% to $1.3 billion, while net results moved from a loss of $30 million in 1997 to earnings of $103 million last year. By the end of 1999, the Brazilian manufacturer expects regional jet deliveries to rise from seven to 12 a month.
Source: Airline Business
