Airline News
Boeing profit up, but Dreamliner remains critical drag
October 28th 2014
Boeing has reported a third-quarter net income of $1.36 billion, up 18% or $200 million, compared to the same period a year ago. Read More »
The manufacturer’s Commercial Airplanes unit performed strongly, with revenue increased 15% year-on-year to $16.11 billion and deliveries up 9% to 186 commercial aircraft in the third quarter.
Commercial Airplanes booked 553 orders in the quarter, bringing the backlog to 5,500 aircraft valued at $490 billion; more than half are commitments from the Asia-Pacific region.
However, Boeing shares still fell almost 4% following the announcement, as investors grew weary over another hike in production costs for the B787.
The Dreamliner programme’s deferred production cost, an accounting measure of how efficient an assembly programme becomes over time, rose 4%, to $25.2 billion, topping the $25 billion cap Boeing had forecast and putting a critical drag on cash flow.
"[We’re] continuing to make progress. Still got a long way to go," Boeing's chief financial officer, Greg Smith, said in summarizing the 787 program. "We've got the enterprise engaged on how to capture productivity."
Earlier this month, Boeing reached a settlement deal with Air India over the carrier’s losses suffered as a result of the repeated grounding of the B787 last year over battery fires, loss of revenue due to recurrent technical issues and resultant adverse publicity to the airline.
Fears of a potential onslaught of similar compensation claims continue weighing on Boeing’s share price, which has now lost over 10% this year.
