Boeing warned Wednesday that company revenues and aircraft deliveries could fall in 2016 and forecast profits well below what analysts were expecting after a fourth quarter slowdown last year. Shares of the aerospace giant fell a sharp 9.6 percent to $115.68 after it projected 2016 commercial aircraft deliveries of between 740 and 745, down from 762 in 2015 and the first decline since 2010. Boeing said it expects flat to slightly lower 2016 revenues and core earnings per share of $8.15-$8.35, well below the $9.43 expected by Wall Street analysts.
Boeing offered little elaboration on the weaker outlook, saying global growth "continues at a moderate pace" with the commercial airline business a profitable "long-term growth industry." "With clear strategies and strong positions in our markets, a large and diverse order backlog worth nearly $500 billion, and multiple additional production rate increases planned yet this decade, we are well positioned for profitable growth and higher cash flow as we move into our second century in business," Boeing chief executive Dennis Muilenburg said.
But the weak outlook for deliveries threatens to erode Boeing's advantage over rival Airbus, which said on January 12 that it expects 2016 deliveries to rise to 650 aircraft from 635 in 2015. Airbus reported a substantial edge in net orders last year, 1,036 for the European maker versus 768 for Boeing. Barclays said in a note that the disappointing outlook likely reflects higher expenses and research and development costs, as well as slowing production of its the profitable 737 midrange aircraft. Deliveries of the 737 were down to 120 in the fourth quarter from 126 in the third quarter, according to Boeing's results.
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