Boeing on track for 787 delivery

Boeing 787 Dreamliner

MINNEAPOLIS -- Boeing Co.'s first-quarter profit fell almost 15 percent as it delivered fewer aircraft, but the company said it's on track for its most closely watched delivery, the first 787, by the end of the year.

Boeing's first-quarter report Wednesday was notable for all the potential bad news that wasn't there. Sticking with plans to deliver the 787 by the end of the year might reassure those analysts who had been worried about further delays.

Its 2010 profit guidance remained unchanged, except for an accounting charge that investors found out about last month. And it said 2011 revenue should rise.

"The financial outlook for the world's airlines has improved noticeably since last quarter," said Jim McNerney, chairman, president and chief executive officer, on a conference call Wednesday.

In relatively short order, Boeing has become one of the Charleston region's most important private-sector employers under an expansion driven by the delayed launch of its new 787 passenger plane.

Since last summer the aerospace giant has purchased two North Charleston-based suppliers that make major pieces of the jet's fuselage. In the fall, Boeing picked Charleston International Airport as the site for its second 787 assembly plant, "which is now well into construction," McNerney said.

The existing Dreamliner production facility is in Everett, Wash.

The North Charleston factory is set to open in mid-2011. It is expected to employ several thousand workers and turn out three 787s a month starting around 2013. Boeing estimated that its investment in its North Charleston expansion this year will total around $700 million.

Beset by production problems with suppliers, the 787 took its first flight more than two years late. Boeing said the test fleet has flown for a total of 500 hours as of Friday. One of the planes was moved to Florida on Sunday for extreme-weather testing at Eglin Air Force Base.

McNerney said the 787 "is performing very well."

Boeing has orders for 866 of the planes, from 57 customers. The sooner Boeing delivers the plane, the sooner it gets paid, although customers have made major pre-delivery payments.

Japan's All Nippon Airlines is set to take delivery of the first model later this year, a target that McNerney said was still on track.

The 787 update came as Boeing said it earned $519 million during its first quarter, or 70 cents per share. Analysts surveyed by Thomson Reuters expected a profit of about 63 cents per share.

Revenue fell almost 8 percent to $15.2 billion, close to what analysts had forecast.

The Chicago-based aerospace and defense contractor said it expects revenue of $64 billion to $66 billion this year. Analysts had been expecting $65.04 billion.

It reduced its full-year forecast to $3.50 to $3.80 per share to account for a previously announced charge of 20 cents per share related to recently passed health care legislation.

Boeing said it expects that 2011 revenue will be higher as it delivers the 787 and a new version of its 747.

McNerney said the company will decide soon whether to increase the production rate on its workhorse 737 from the current 31 per month.

Boeing's commercial airplanes unit delivered 108 aircraft during the first three months of 2010, down 11 percent from 121 planes a year earlier.

Revenue fell 13 percent to $7.47 billion. That segment's profit jumped 63 percent to $679 million because the year-ago quarter was held down by an accounting charge.

John P. McDermott of The Post and Courier contributed to this story.