surprised with a strong gain in quarterly earnings Wednesday, reflecting improvements in efficiency and demand for next-generation aircraft that offset a decline in sales at the world's leading commercial aircraft maker.
Boeing, which has been locked in an increasingly competitive brawl with its European rival
, earned $662 million, or 74 cents a share, in the fourth quarter, compared with $435 million, or 45 cents a share, a year earlier. The results were a nickel better than expected.
Fourth-quarter revenue dropped 11% from $15.2 billion to $13.8 billion last year. But the weakness was diminished by continued cost improvement on next-generation 737 and 777 jets. The Seattle-based company said the improvement offset fewer deliveries and a less favorable model mix.
Perhaps the best example of its improved efficiency lies behind the commercial airplane segment, where operating margins increased by 17 times. The company brought in $698 million in operating earnings on $10 billion revenue. The prior quarter Boeing took in less money on more sales. Operating earnings for the fourth quarter in 1998 were $54 million on $12.3 billion in revenue.
Chief executive officer Phil Condit said in a statement that the company had pursued rigorous reform of its design and production processes.
On the military aircraft and missile side of Boeing's business, the company earned $401 million on $3.3 billion in revenue compared with $361 million on $3.9 billion in revenue.
In December, Boeing introduced a new Joint Strike Fighter X-32 that symbolizes the company's commitment to cutting costs across its production lines.
"The JSF is the most efficient aircraft design to date," Condit said. "We have a lean manufacturing environment and our fighter represents a complete and affordable solution for the customer."
Space and communications segments earned $123 million on revenue of $1.9 billion, compared with $91 million on revenue of $1.7 billion a year earlier. The segment's operating margin for the fourth quarter nearly doubled.
Last week Boeing bought
satellite division for $3.75 billion as a shift to become a dominant player in the lucrative aerospace industry.
The deal, when completed, will lift revenue and earnings from Boeing's space and communications operations about 35%, the company said.
Another major company in the aerospace business,
, also reported better-than-expected quarterly results Wednesday, despite weakness in its Latin American and Asian markets.
The Hartford, Conn.-based company that also manufactures elevators, escalators, and heating and air conditioning systems, reported fourth-quarter earnings of $362 million, or 70 cents a share, up 21% from $299 million, or 55 cents a share, a year earlier. Consensus expectation for the quarter was 69 cents, according to a survey by
First Call/Thomson Financial
Revenue for the fourth quarter totaled $6.5 billion, up 9% over the prior year.
An aggressive campaign of acquisitions totaled $985 million in the quarter, including the firm's
elevator-maker's purchase of 80% of
"We are confident of delivering more of the same in 2000, with earnings-per-share growth of 15% or more, and strong cash generation," chairman and chief executive George David said in a statement.
Boeing was up 1 1/8 to 46 1/8, while United Technologies was down 1 5/16, or 2%, to 61 7/16 in midday trading Wednesday. (Boeing closed down 15/16, or 1.95%, at 47 1/16. United Technologies closed down 2 1/16, or 3.29%, at 60 11/16.)