Kevin O'Toole/LONDON
THE EFFECTS OF Boeing's ten-week strike fed through into a weak first-quarter performance, but the group remains confident that sales will rebound sharply this year, echoing growing optimism throughout the US aerospace industry.
With production picking up slowly, following the October strike, airliner deliveries slumped to just 40 in the first quarter, with only the 777 programme maintaining numbers. A year ago, Boeing had turned out 59 aircraft in the first three months.
The falling numbers wiped close to $1 billion from the group's first-quarter sales and net profits dipped to $119 million, from $181 million a year ago.
Output is expected to climb back to 60 aircraft in the second quarter as the company heads towards a year-end total of 215 deliveries.
McDonnell Douglas' (MDC) civil-airliner deliveries also dried to a trickle in the first quarter, but without immediate prospects of an upturn. Deliveries totalled four MD-80s, three MD-90s and three MD-11s, down from nine twinjets and four trijets a year ago.
Airliner revenues virtually halved to $428 million, further compounded by the fact that two of the MD-90s and two of the MD-11s were sold on operating lease. The overall group nevertheless managed to continue its run of record results, thanks to its booming military-aircraft operation.
Profits were buoyant almost everywhere among the major US defence contractors. Northrop Grumman, helped by a month of operations from the Westinghouse Electric acquisition, managed to hold revenues at $1.6 billion while pushing up profits by 20%, to $61 million. The rise came despite a $25 million charge to cover the ending of nacelle work carried out for bankrupt Fokker.
Lockheed Martin, fresh from signing its deal to acquire the bulk of Loral, also had improved first-quarter profits, up to $272 million. President Norman Augustine says that this represents a real rise of 10%, excluding the 1995 provision for the cost of the merger with Martin Marietta.
Augustine adds that, although group sales slipped over the quarter, this was caused by the timing of aircraft deliveries rather than a long-term trend.
He points to the $7 billion in new business which the group booked in the quarter as evidence of the merger's success.
On the downside, Lockheed Martin is to cut 1,200-1,500 employees from the 10,300-strong workforce at its Aeronautical Systems division in Marietta, Georgia, citing funding cuts and delays to the F-22 programme, slower C-130 production and a halt in P-3 manufacture.
Source: Flight International
