Updated from 9:34 a.m. EDTBoeing ( BA) announced a blow-out first quarter that topped Wall Street estimates, as expected, but guided 2004 and 2005 earnings higher, based on strong business trends. Boeing had net income of $623 million, or 77 cents a share, a $1 billion improvement from its net loss of $478 million, or 60 cents a share, in the previous year. Excluding the impact of gains from a federal tax income, Boeing earned 65 cents a share, which tops the 44-cent Wall Street estimate, as expected. Revenue came in at $13 billion, up from $12.3 billion in the year-ago quarter and better than the $12.7 billion expected by analysts, according to Thomson First Call. In reaction, shares of Boeing were up $1.06, or 2.4%, to $44.61, at midday. "Boeing's first-quarter 2004 results reflect our drive to improve profitability through intense focus on execution across all of our businesses," said Harry Stonecipher, in his first full quarter as the company's new CEO and president. Last Thursday, Boeing told analysts that it would
Operation: Damage ControlThe strong first-quarter results and better-than-expected guidance can only help Boeing rebuild its reputation on Wall Street. Last week, Darleen Druyun, a former company vice president, pleaded guilty to a federal conspiracy charge as part of a government investigation into Boeing's bid on a $17 billion contract to lease and sell tankers to the Pentagon. In November, Boeing fired former CFO Michael Sears and Druyun for unethical behavior, leading to the resignation of then CEO Phil Condit. Soon after, the company brought Stonecipher, a former president and board member who retired in 2002, back into the fold to help repair the company's reputation. Stonecipher's been in this situation before and is well-known for his candor when dealing with bad press. In 1987, while with the Sundstrand Corp., a defense company, Stonecipher negotiated a settlement with a federal grand jury investigation into allegations the company had overcharged the government. On Boeing's conference call discussing results, Stonecipher stressed the company's commitment to restoring its reputation with the customers, suppliers and its own employees, adding that the company continues to execute, despite the public relations problem. "I don't think
Boeing's Defense Unit, Its Best OffenseAll of Boeing's units performed well in the first quarter, but the IDS unit continues to be the company's new growth engine, supplanting the commercial airline unit, accounting for more than half of the company's total revenue. In the first quarter, IDS revenue came in at $7.4 billion, an 18% jump from a year ago, led by better-than-20% increases in revenue from network systems and launch and orbital systems. The IDS unit's adjusted earnings from operations came in at $738 million, up 22% from last year, driven by rising adjusted operating margins, which came in at 10% for the quarter, up from 9.6% a year ago.