Credit storm continues to batter Boeing
US manufacturer Boeing has released poor first-quarter results as a result of the economic crisis, which has caused a downturn in both demand for passenger and cargo, and made it harder for firms to win the finance needed to buy planes.
The figures showed that profits halved in comparison to the same period a year earlier, with operating earnings in the Commercial Airplanes segment falling by 58%. Changes to production schedules for its popular 777 marque, cancellations for the 787 type and a negative order book in the first quarter have combined to produce a set of results that has little in the way of encouragement.
Although the manufacturing giant has still has an order backlog of US$339 billion, slowing delivery schedules make it harder to tap into this revenue. Furthermore, budget considerations at the US Department of Defense are also hurting the firm, and Boeing is facing unpopularity at home via its decision to lay off technical staff in January.
“The expanded global economic downturn is presenting unprecedented challenges in our commercial airplane markets,” said Boeing chairman, president and CEO Jim McNerney.
“We believe we are better positioned than most companies to withstand the ongoing pressures of this economy and we are not hesitating to take necessary actions to preserve our financial strength and maintain our ability to invest and grow for the long term. Performance across the overwhelming majority of our programs remains solid, and we are making progress towards our milestones on the 787 and other important programs,” McNerney added.