By Jon Ostrower & Doug Cameron
Boeing Co. is scheduled to announce its first quarter-quarter
earnings before the market opens Wednesday.
Here's what you need to know:
EARNINGS FORECAST: Net profit for the quarter of $1.76 a share
is the consensus of analysts, according to FactSet, compared with
$1.28 a year prior. Analysts tend to focus on Boeing's "core"
earnings, which exclude parts of its pension expenses driven by
market volatility. Consensus expectations are for core earnings of
$1.80 a share, compared with $1.76 a year ago.
REVENUE FORECAST: Revenue of $22.5 billion is forecast for the
quarter, compared with $20.47 billion a year ago.
WHAT TO WATCH:
--DREAMLINER COSTS: Boeing's flagship 787 Dreamliner is now
flying off assembly lines at a faster pace than any other
twin-aisle jet in its history -- 10 each month. Analysts are
watching for indications of whether the company's cost-reduction
will face additional disruption with unit costs continuing to
exceed the sale price. The company in 4Q blew past $26 billion in
combined per unit production losses -- forecast to top out around
$25 billion -- and expected to climb still higher through 2015.
Boeing maintains it will break even and begin generating positive
cash in 2016. Boeing says the program is profitable, based on its
accounting method, which spreads costs and revenue for the 787 over
many years.
--TANKER PROGRESS: The U.S Air Force doesn't expect Boeing to
fly a fully kitted-out version of the KC-46 until July, another in
a series of creeping delays leaving precious little testing time
before a decision on moving to production in October. Analysts are
watching for additional charges as the company directs more
resources -- including staff from its commercial jet unit -- to try
and keep the $49 billion project on track. Further delays are
unlikely to help Boeing's bid alongside Lockheed Martin Corp. to
win the $90 billion Long-Range Strike Bomber contract.
--MUSICAL CHAIRS: Even with Boeing's record output, not all
parts of the aerospace industry's vast supply chain have been able
to keep up. Seat suppliers have lagged, leaving the Chicago-based
plane maker and Airbus Group NV, its European arch rival, to stall
delivery to carriers like American Airlines Group Inc. as complex
business class seats are in short supply. Investors and analysts
will be looking for signs the seat shortage will dent its output
forecast as customers are left standing.
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