Boeing profits surge but tougher 2014 awaits

US aerospace giant Boeing Wednesday reported a big jump in quarterly earnings, but signaled a leaner 2014 profit outlook after last year’s boom.

Boeing’s fourth quarter ended on a high note, with the company achieving record annual commercial aircraft deliveries on its way to notching a 26.1 percent rise in profits compared with the year-ago period.

But Boeing’s 2014 earnings forecast pointed to headwinds in both its commercial and defense divisions.

One ripple effect from the late-2013 surge in commercial deliveries was that some of the late-2013 deliveries came early and at the expense of 2014 results, Boeing executives said. As a result, the company now forecasts essentially flat 2014 per-share earnings compared with the 20 percent gain in 2013.

Also weighing on results: the continued drag of lower US defense spending in the wake of government budget cuts. Boeing forecast revenues of $30-$31 billion in 2014 in its defense division, down from $33.2 billion in 2013.

Boeing chief executive Jim McNerney said a late-2013 federal government budget deal brings some relief from some of the worst effects of the sharp sequestration budget cuts.

“That said, we remain very concerned about longer-term budget uncertainty and the ultimate consequences of sequestration on national security, and the potential devastating impact to the nation’s industrial base,” McNerney said.

McNerney, addressing analysts for the first time since the company announced senior executive changes in December, also said he is not planning to retire “anytime soon.”

The Boeing announcement included the promotion of Dennis Muilenburg to president, fueling speculation about McNerney’s plans.

“While you may be seeing more of them, it doesn’t mean you’ll be seeing less of me,” McNerney said.

Net earnings in the October-December period were $1.2 billion on revenues of $23.8 billion, compared with $978 million on revenues of $22.3 billion in the year-ago quarter.

Boeing reported full-year 2013 earnings of $4.6 billion on revenues of $86.6 billion, up 17.6 from the 2012 profits of $3.9 billion on revenues of $81.7 billion.

McNerney said the company has a “huge opportunity” after investing heavily in the 787 Dreamliner aircraft and other major new aircraft that are now able to be “harvested” through more cost-effective production.

Production on the 787 has reached 10 per month, but deliveries to customers are still at seven a month; the company said it wants to boost deliveries to 10 per month.

Boeing forecast 2014 earnings of $7.00-$7.20 per share, below analyst estimates for $7.57. Boeing earned $7.07 per share in 2013.

Boeing executives said 2014 earnings would also be hit by a one-time cash payment of $300 million to Washington state workers following an agreement with the International Association of Machinists on a new long-term contract.

Boeing was the best performer in the Dow Jones Industrial Average in 2013, with shares soaring 80 percent as it benefited from a surge in airline investment, but some analysts think the company’s streak is losing momentum.

“2013 was a year loaded with positive surprises on many fronts,” said Barclays. “With shares having re-rated so significantly over the course of 2013, we think it is becoming increasingly difficult to argue for upside.”

Boeing shares were down 5.4 percent at $129.76 in midday trade.

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Turkey awaits ‘historic’ ceasefire call by Kurdish rebel chief

By Agence France-Presse on Friday, March 22nd, 2013

Jailed Kurdish rebel chief Abdullah Ocalan was set to call a “historic” ceasefire on Thursday, raising expectations for an end to a three-decade conflict with Turkey that has cost tens of thousands of lives.

The widely anticipated ceasefire call is to come in a letter penned by the leader of the outlawed Kurdistan Workers’ Party (PKK) from his isolated island prison cell, and millions of people nationwide are set to tune in to hear his words read out on television and radio.

The announcement, which Ocalan in a previous letter said would be “historic”, has been timed to coincide with the Kurdish New Year, or Newroz, that will see hundreds of thousands gather for celebrations in the Kurdish-majority city of Diyarbakir.

The ceasefire call would cap months of clandestine peace talks between Turkey’s spy agency and the state’s former public enemy number one Ocalan, who has been serving a life sentence for treason and separatism on Imrali island off Istanbul since 1999.

Prime Minister Recep Tayyip Erdogan and Ocalan both appear to have staked their political futures on the renewed push to end the 29-year armed campaign for self-rule that has killed some 45,000 people, mostly Kurds.

Erdogan said he was putting his faith in the peace process “even if it costs me my political career”, in the face of accusations that Ankara was making concessions to Ocalan — routinely labelled a “terrorist chief” and “baby-killer” by Turks.

A solution to Turkey’s ingrained Kurdish problem could etch Erdogan’s name in history, in much the same way the abolition of slavery enshrined Lincoln’s memory for Americans a century ago, wrote Murat Yetkin, editor-in-chief of the Hurriyet Daily News.

“If he can do this and convince people that a political solution to Kurdish problem is on track and the conflict is over, yes, there is a chance that Erdogan can be the Lincoln of Turkey,” he wrote in February.

Ocalan — known as “Apo” or uncle to Kurds — has said he wants peace for the greater good of his people.

“Consider Apo dead if this process fails. I am simply out,” the burly 64-year-old was quoted as saying in a rare prison meeting with Kurdish lawmakers last month.

Ocalan’s expected ceasefire is likely to be in return for wider constitutional recognition and language rights for Turkey’s up to 15 million Kurds.

The peace plan is expected to be the result of written consultations between Ocalan, pro-Kurdish lawmakers and PKK bodies in Europe and northern Iraq, under the close monitoring of Turkish agents.

Kurdish lawmakers say Ocalan might ask for commissions to be established to properly monitor the ceasefire, and call for safe passage for fighters wishing to leave Turkey.

Erdogan has already vowed that no militant would be “touched if they leave the land”.

But the rekindled peace process has not been without controversy.

Nationalist opposition leader Devlet Bahceli has accused Erdogan of “treason” and “selling out the country to a bunch of bloody bandits”.

The ceasefire will also be a test of Ocalan’s influence over the PKK after years of being cut off from the outside world.

At least four previous ceasefire attempts called by Ocalan have stumbled over a lack of faith between the PKK and its arch enemy Ankara. With each failed ceasefire, the violence escalated.

Asked if the new peace process would be successful, Justice Minister Sadullah Ergin told reporters “there are no guarantees”.

“But we know what is going to happen if it does not,” he said.

In a sign of goodwill, the PKK last week freed eight Turkish prisoners it had been holding hostage for some two years.

The rebel movement wants to see the release of hundreds, if not thousands, of people detained on charges of links to the PKK.

Under Erdogan, in power since 2002, the Kurdish minority has been granted more language rights in recent years, including the establishment of a Kurdish-language television channel.

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