Boeing Profits Up

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1215-boeing-DreamlinerAfter facing critical tweets from President Trump about its expensive military planes, Boeing reports quarterly profits better than expected. But the uptick is from commercial plans, a market Boeing is leading.

Boeing's fourth-quarter press release included a few cheery statements from Chairman, President and Chief Executive Officer Dennis Muilenburg:

"With solid fourth quarter operating performance and a sharp strategic focus, we extended our aerospace market leadership in our centennial year and positioned Boeing for continued growth and success in our second century."

"We led the industry in commercial airplane deliveries for the fifth consecutive year, achieved healthy sales in our defense, space and services segments, and produced record operating cash flow, which fueled investment in innovation and our people and generated significant returns to shareholders."

"Looking forward, our team is intent on accelerating productivity and program execution to deliver increasing cash and profitability from our large and diverse order backlog of nearly $500 billion, standing up our new integrated services business, and capturing an even greater share of the the growing global aerospace market to deliver superior value to our customers, shareholders and employees."

Bloomberg reports Boeing shares at record high and that the "787 Dreamliner emerged from a decade of losses." The article quotes an analyst: "We think this release is pretty boring -- and boring is good."

But Fortune warns, "Its overall outlook for 2017, however, is not likely to inspire confidence. Boeing is calling for adjusted earnings between $9.10 and $9.30 this year, which is below the $9.31 that Wall Street analysts were projecting. The company expects revenue will fall to somewhere between $90.5 billion and $92.5 billion, compared to $94.6 billion in 2016."

Image source.

Discussion:

  • We see a lot of jargon in the press release. Is it appropriate or off-putting?
  • What does the analyst mean by the "release is pretty boring." Should it be more exciting? It is, after all, good news.
  • What are the dangers of the Boeing CEO quotations being overly optimistic, as the Fortune article warns. What's the best approach here?