Boeing assumes no 2013 financial impact from Dreamliner grounding
Boeing is continuing to produce 787 Dreamliners, although deliveries have been halted.
Boeing couldn’t calculate the precise financial impact of the 787 Dreamliner grounding because the fate of the aircraft and what will be required to fix it is unknown, but assuming that the impact will be zero is a flight of fancy.
Boeing saw profits increase in the fourth quarter when its 787 Dreamliners were flying undeterred, but in its 2013 guidance assumes no financial impact from the global grounding of the aircraft.
The company even projects that it will deliver more than 60 787 Dreamliners in 2013.
During the fourth quarter Boeing produced five Dreamliners per month. Although production of the grounded aircraft continues, deliveries have been halted pending the completion of the FAA probe.
The FAA ordered the review of the Dreamliner on January 16. Boeing issued the following statement about that today:
Our first order of business for 2013 is to resolve the battery issue on the 787 and return the airplanes safely to service with our customers. At the same time, we remain focused on our ongoing priorities of profitable ramp up in commercial airplane production, successful execution of our development programs, and continued growth in core, adjacent and international defense and space markets.
Some reports suggest that the problem with the aircraft may be wider than a battery problem, and a costly redesign of the aircraft is a possibility.
But, Boeing is undeterred in its public statements, and goes so far as to say that “the company’s current 2013 financial guidance assumes no significant financial impact from the FAA directive.”
In fact, Boeing assumes in its guidance that it will deliver more than 60 Dreamliners in 2013, and 635 to 645 aircraft overall.
Boeing’s revenue guidance for 2013 is between $82 and $85 billion, and it forecasts earnings per share of $5 to $5.20.
If the Dreamliner probe continues for an extended period, or if wholesale changes to the aircraft are required, Boeing will have to lower its guidance substantially.
For the fourth quarter, which was unaffected by the global grounding of the 787 Dreamliner, Boeing’s profits fell nearly 30% to $978 million.
Revenue for the quarter increased 14.3% to $22.3 billion. Driven by “higher delivery volume,” commercial aircraft revenue jumped 32% to $14.2 billion, Boeing states.