Boeing sees smaller 2012 profit on rising pension expenses

Boeing Co. forecast a smaller 2012 profit as rising pension costs and declining U.S. defense spending erode gains from jetliner production increasing to record levels.

Full-year net income will be $4.05 to $4.25 a share, Chicago-based Boeing said in a statement today. That trailed the $4.89 estimate of 27 analysts surveyed by Bloomberg. Sales may be in a range of $78 billion to $80 billion, compared with the average projection of $78.4 billion.

“With a record backlog and intense focus on productivity, we are well positioned to deliver growth and increased competitiveness, even as we face constrained U.S. defense spending and pension headwinds,” Chief Executive Officer Jim McNerney said in the statement.

Airliner deliveries should climb to a range of 585 to 600 planes, topping 2011’s 477. Boeing is boosting output by more than 60 percent in four years through 2014 to pare a record order backlog from customers seeking more fuel-efficient jets, and a new Machinists contract signed last month should ensure labor peace in 2012.

The shares fell 0.9 percent to $74.70 at 7:46 a.m. before regular New York trading.

Full-Year Profit

Net income in 2011 was $4.02 billion, or $5.34 a share, on revenue of $68.7 billion, Boeing said. That pushed earnings past the top of the increased range the company gave in October of $4.30 to $4.40 a share.

Fourth-quarter net income was $1.84 a share. Adjusted earnings were $1.32, exceeding analysts’ $1.01 projection. Sales were $19.6 billion.

The company came up short in meeting its 2011 forecast for delivering its two newest models, the 787 Dreamliner and the 747-8 jumbo jet, both of which entered service last quarter after years of delays. That means those deliveries will shift to 2012.

Boeing said today its delivery projection for this year includes 70 to 85 of the two new models, half of which will be Dreamliners.

Boeing’s backlog rose to more than 3,700 planes valued at $296 billion at the end of December. Boeing Commercial Airplanes President Jim Albaugh has said he would like to whittle the number of unfilled orders to three or four years’ worth of production, so that airlines don’t have to wait so long between agreeing to buy jets and receiving them.

Top Spot?

While Airbus SAS is also increasing output, Albaugh said in November he expects by next year to reclaim the top spot in commercial-jet production that Boeing lost to its rival in 2003. Toulouse, France-based Airbus delivered a record 534 aircraft in 2011 and predicted shipments would rise to 570 this year.

Boeing is counting on the popularity of the 787, the first composite-plastic airliner, and the 737 MAX, an upgraded version of the world’s most widely flown jet. The company is building 2.5 Dreamliners a month now, with a goal of 10 a month by the end of 2013, and expects MAX deliveries to start in 2017.

The planemaker’s defense division is looking for spending cuts and more international sales as the U.S. Defense Department pares future budgets. Boeing said this month it is leaving Wichita, Kansas, where it has built military planes since 1929, and moving some of the work to cheaper locations.

--Editors: Ed Dufner, Cecile Daurat

To contact the reporter on this story: Susanna Ray in Seattle at sray7bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufnerbloomberg.net