Boeing Co., the world's second-largest commercial aircraft maker, reports first-quarter earnings on Wednesday. The following is a summary of key developments and analyst opinion related to the period.
OVERVIEW: Orders for Chicago-based Boeing's jetliners have fallen sharply this year as fewer people fly and air cargo volumes shrink amid the slowing world economy. Airlines have cut flights and some have delayed orders and deliveries of new jets, while tighter credit markets have made it more difficult for customers to get loans to buy new planes.
In response to the sinking demand, Boeing in January announced plans to cut a total of 10,000 jobs — about 6 percent of its total work force — after reporting a surprise fourth-quarter loss.
The tough market conditions also have rippled through Boeing's production schedule. Earlier this month, Boeing said it would trim monthly production of its twin-aisle 777 by 28 percent starting in June next year and delay plans to boost production of its 747-8 and 767 planes. Those changes and anticipated lower prices are expected to lower first-quarter earnings by about 38 cents per share.
Meanwhile, Boeing says the first test flight of its long-delayed 787 — a hotly anticipated plane made for fuel efficiency with lightweight parts — remains on track for the second quarter. Customers canceled orders for 32 of the planes during the quarter.
BY THE NUMBERS: Analysts surveyed by Thomson Reuters, on average, expect Boeing to report a profit of 91 cents per share on revenue of $16.62 billion. During the same period last year, Boeing earned $1.62 per share on revenue of $16 billion.
ANALYST TAKE: Analysts say they expected Boeing's recent production cuts, noting lower demand for planes such as cargo freighters. Some anticipate further cuts, particularly in Boeing's top-selling 737 by the middle of next year.
Even with a hefty backlog of commercial plane orders, "we're cautious that the current dislocation between capacity growth and declining traffic will result in further rate cuts," Cowen & Co. analyst Cai von Rumohr, who downgraded Boeing's stock, wrote in a note to investors.
But Jefferies & Co. analyst Howard A. Rubel wrote that some markets outside the United States are "starting to show some improvement" in air traffic, and that investors would be rewarded with long-term growth if Boeing achieves its 787 development targets and wins several high-profile defense contracts.
WHAT'S AHEAD: Boeing has said it expects to fulfill deliveries scheduled for this year and early 2010 and would provide financing of about $1 billion to customers if necessary. But Boeing remains cautious about financing planes set for delivery starting around mid-2010.
Boeing expects U.S. defense spending — a major source of revenue for its defense unit — to level off over the next several years. Boeing's defense division accounts for about half the company's overall revenue.
STOCK PERFORMANCE: During the quarter, Boeing shares slid nearly 17 percent, briefly hitting their lowest point in about six years — $29.05 per share.
