Boeing Posts $347 Million Profit

Boeing Co., still struggling to rid itself of production problems and fretting about the continued impact of the Asian financial crisis, posted third-quarter net earnings of $347 million or 36 cents a share Thursday.

That compares with a loss of $696 million or 72 cents a share on a diluted basis a year ago, when the brunt of the production difficulties hit.

Analysts surveyed by Zack's Investment Research Inc. had estimated earnings at 28 cents per share.

Revenues for the quarter ended Sept. 30 were $12.7 billion, up 12 percent from $11.4 billion a year ago.

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Earnings for the quarter included recognition of tax benefits related to previous years' research and development tax credits worth $57 million or 6 cents a share.

During the quarter, Boeing delivered 123 commercial jets, up from 89 a year ago. So far this year, Boeing has delivered 368 planes, and says it still expects to deliver 550 by the end of the year.

That includes, however, delivering 36 jets now in storage because Asian airlines are having financial troubles or customers are trying to arrange financing.

Boeing has been trying to more than double aircraft production, but ran into problems last year with snarled assembly lines, parts shortages and the need to make changes in its new-generation 737 jetliners following flight tests. Those problems cost Boeing billions of dollars, including a $1 billion after-tax charge taken in third-quarter 1997.

Boeing Chairman Phil Condit said Thursday that while commercial jet sales were higher, the overall profit margin was down. Further, he said, no gross profit has yet been recognized from the new-generation 737 jets.

He warned that the economic situation in Asia still poses a significant risk to Boeing over the next several years. Boeing already plans to reduce its 747 jumbo jet production rate from five jets to 3 1/2 planes a month by the middle of next year, and Condit has said the rate may go lower if Asian conditions don't improve.

On the defense, space and information side of the business, sales for th first nine months were up about 8 percent, most due to higher military aircraft deliveries. Sales for the year are forecast at $19 billion to $20 billion.

For the first nine months of 1998, Boeing had profits of $655 million or 67 cents a share on revenues of $39 billion, more than double the net earnings of $320 million or 33 cents a share on revenues of $34.1 billion for the same period of 1997.

Written By George Tibbits, AP Business Writer