A 58-day Machinists Union strike, delays in the 747-8 development program and a reserve for litigation losses moved Boeing into the red for the fourth quarter, the company said today.
The Chicago-based company reported losses of $56 million or 8 cents a share in the fourth quarter of 2008 compared with earnings of $1.03 billion for the fourth quarter of 2007.
For the full year, Boeing said, its earnings totaled $2.7 billion compared with $4.07 billion for 2007.
Revenues declined 27 percent to $12.7 billion due in large part to the strike and its aftermath. Boeing delivered 70 fewer airliners than projected because of the strike which shut down production.
“The progress wemade in many areas of Boeing during 2008 was outweighed by the impact of the strike and our performance on some key development programs,” said Jim McNerney, Boeing’s chief executive officer.
The company also took losses because of delays in the development of its 747-8, the successor to the 747-400. Many engineers that had been assigned to the 747 were diverted to work on the oft-delayed 787 Dreamliner, thus pushing out delivery of the first 747-8 into the third quarter of 2010. The 747 delay was estimated to cost the company 61 cents a share in earnings.
Boeing reported that one customer with deliveries of its 787s scheduled for late in the next decade had cancelled its orders, reducing the 787 order book backlog to 895 planes.
The company’s defense side was solidly profitable with operating margins of 11 percent in the fourth quarter.
The company predicted earnings of $5.05 to $5.35 a share for 2009, below some of Wall Street’s expectations. Boeing said it will deliver between 480 and 485 commercial airplanes this year, somewhat below an earlier forecast.