=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2002/01/23/f= inancial1315EST0170.DTL ---------------------------------------------------------------------- Wednesday, January 23, 2002 (AP) Boeing income falls 79 percent, hit by post-Sept. 11 downturn DAVE CARPENTER, AP Business Writer (01-23) 14:39 PST CHICAGO (AP) -- Boeing Co. rode out the post-Sept. 11 decline in air travel to post a respectable $100 million profit in the fourth quarter, but warned a cloudy future outlook will likely force revenues lower for each of the next two years. Officials of the world's biggest airplane maker said its growing defense, space and financial units will help cushion the shock of an aviation downturn they acknowledged makes for a highly uncertain 2002 and 2003. "We are in a challenging period for commercial aircraft, but all of our businesses are performing well and our corporate structure provides real opportunity," chairman and CEO Phil Condit said on a conference call, emphasizing the strength of Boeing's defense, space and finance businesses. Analyst Paul Nisbet of JSA Research said the company isn't yet diversifi= ed enough to avoid a big hit from aviation's decline, as the 79 percent drop in fourth-quarter net earnings showed. "The big concern is how long this malaise is going to plague their commercial aircraft division," he said. "This will be their toughest year, just downsizing and trying to keep up the earnings efficiency that they have had while they downsize." Net earnings were $100 million, or 12 cents a share, down from $481 million, or 55 cents a share, a year earlier. The company took $622 million in charges, largely related to the attacks, including moves to lay off as many as 30,000 of its 95,000 employees as a result of weakened demand. Revenues climbed to $15.7 billion from $14.7 billion in the same period = of 2000. Excluding the charges, earnings were 90 cents a share, matching the estimate of Wall Street analysts surveyed by Thomson Financial/First Call. Investors sent Boeing shares down 45 cents to close at $39.33 Wednesday = on the New York Stock Exchange. The stock is down from almost $70 last May but up sharply since hitting a six-year low of $27.61 in the days after the attacks. Boeing's commercial aircraft division enjoyed a 7 percent rise in revenu= e, to $9.34 billion from $8.66 billion a year earlier, with its share of company revenues holding steady at 59 percent. But its operating profit sank to $82 million from $856 million in the same quarter of 2000. Revenue from the military aircraft and missile systems unit climbed to $3.45 billion from $3.16 billion, while the space and communications business had revenue of $2.91 billion, down slightly from $2.97 billion. Its commercial financing division saw revenues rise 10 percent to $247 million. For the full year, net earnings were $2.83 billion, or $3.41 a share, up from $2.13 billion, or $2.44 a share, in 2000. Revenues rose 13 percent to $58.2 billion from $51.3 billion. Boeing lowered its projection for 2002 revenues by $1 billion to $54 billion in 2002 and pegged 2003 revenues to fall further to $52 billion. The company said it expects to deliver about 380 airplanes in 2002, down from 527 last year, and from 275 to 300 in 2003. But it acknowledged that the outlook remains uncertain, amid industry skepticism that those numbers will hold. Condit said that after a spate of aircraft delivery deferrals by the company's airline customers in the wake of the attacks, there have not been many lately. A greater concern is prospects for production in 2003, which Condit acknowledged will be "a down year" even though the company already has sold about 75 percent -- roughly 200 planes -- of the total it projects to deliver next year. "We do not have great insights today about when that might start back up= ," he said. "The first thing is that passenger traffic has got to come back. The second thing is that airlines have got to earn money. Then there's a question about how many airplanes are in storage." Company officials indicated, however, that there are no plans for additional layoffs beyond those they warned of last fall. On the Net: www.boeing.com =20 ---------------------------------------------------------------------- Copyright 2002 AP