Boeing Has Blowout Quarter, Continues To Watch Spirit Progress

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Wednesday, April 25, 2012

Boeing came out today with what could be termed a “blowout” first quarter financial report, beating all analysts’ expectations.

Boeing earned $923 million, or $1.22 per share; revenue increased 30 percent from a year ago; and profits are up about 58 percent from a year ago.

Boeing has a major impact on our local economy. It’s Spirit Aerosystems’ largest customer. In today’s conference call, Boeing also mentioned the impact of the tornado.

Boeing’s top executives couldn’t avoid questions and a few concerns among analysts and reporters about their biggest supplier of airline components, Spirit Aerosystems. So, while Boeing is reporting revenues jumping 30 percent and profits up 58 percent the first quarter, analysts want to know if damage at Spirit will hamper deliveries to come.

Boeing Chairman, CEO, and President Jim McNerny says, "I think Wichita, as you know, the Spirit operation, supports a number of our programs. Where they have the most content is the 737. They've been back to work full time starting since Monday, after roughly a week's delay. And we are cautiously optimistic that there will be no material impact to any of our programs this year."

McNerny also says the tornado damage did not have a significant impact on Boeing’s Wichita facility. Boeing is in a period of production rate increases. That’s because Boeing’s backlog of orders continues to increase, including the new model 737 Max. He says world airlines, particularly in Asia and the Middle East, are replacing older fuel-thirsty planes with more efficient new models. So, this time next year, the 737 production rate will increase to 38 per month from the current 35 per month. It puts pressure on suppliers like Spirit to deliver.

Boeing’s McNerny says he believes the tornado damage impact at Spirit to be manageable. A spirit spokesperson says their recovery efforts are going well.

Boeing’s stock is up nearly 5 and one-third percent on today’s news.

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