Boeing reported a strong fourth quarter on Wednesday and offered a bullish 2019 outlook that implies the company will not see a significant hit from US-China trade tensions. The US aerospace giant, which has been boosted by a multi-year plane building boom amid surging global air travel demand, reported fourth-quarter profits of $3.4 billion, up 3.1 percent from the same period a year ago.
Revenues were $28.3 billion, up 14.4 percent. Several of the company's financial figures were company records, including annual revenues topping $100 billion for the first time at $101.1 billion. "Across the enterprise, our team delivered strong core operating performance and customer focus, driving record revenues, earnings and cash flow and further extending our global aerospace industry leadership in 2018," said Boeing Chief Executive Dennis Muilenburg. Boeing has been ramping up production of its single-aisle 737 plane, which accounted for more than half of the company's commercial deliveries in 2018. On a conference call in October following its previous earnings report, Boeing executives said production of the 737 had reached 52 planes per month, up from the prior 47 and a key step on a planned ramp-up to 57 in 2019.
In October, Muilenburg said he remained committed to China as "one of the fastest growing commercial aviation markets in the world" and was taking a long-term view that "there's strong reasons in both the US and China to have a healthy, prosperous aerospace industry." Boeing is scheduled to hold its fourth-quarter conference call later Wednesday morning.
In December, Boeing opened a new "completion and delivery center" in Zhoushan, China where 737 planes are flown into the country from Seattle and interior work is completed. China is expected to account for about 18 percent of the new planes built over the next 20 years, according to Boeing figures.
Some major companies, such as Apple, FedEx and Caterpillar, have in recent weeks cited sluggishness in China as a headwind for their results. But other companies, including General Motors and Nike, have described solid demand despite slowing growth in China in the wake of a protracted US-China trade war. Another round of talks between the two governments started in Washington on Wednesday, with the Chinese team led by Vice Premier Liu He and the American side by US Trade Representative Robert Lighthizer.
Boeing projected 2019 profits of $19.90 to $20.10 per share, well above the $18.31 seen by analysts. It expects to deliver between 895 and 905 commercial planes, up from 806 in 2018. Boeing's most popular aircraft have moved past the initial production phases when costs are higher into a stage of increased plane delivery that is more profitable. Shares jumped 5.1 percent to $383.49 in early trading.
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