Executive Business Briefing

www.upi.com From the Business & Economics Desk Published 1/30/2003 11:12 AM View printer-friendly version

NEW YORK, Jan. 30 (UPI) -- Here is a look at more of Thursday's top business stories:

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Boeing earnings fall before charges

CHICAGO, Jan. 30 (UPI) -- Boeing Co., the world's largest aircraft maker, said its fourth-quarter net income surged to $590 million, or 73 cents a diluted share, from $100 million, or 12 cents a share during the same period a year earlier.

Excluding Sept. 11-related charges of $622 million in the 2001 fourth quarter, and current charges, Boeing said its net income fell in the latest quarter to $571 million, or 71 cents a share, from an operating profit of $722 million, or 90 cents a share a year earlier.

Analysts on Wall Street had expected Boeing to post a net income of 71 cents a share before special items, according to Thomson First Call.

Revenue declined to $13.7 billion from $15.7 billion during the fourth quarter of 2001.

Phil Condit, chairman and chief executive officer, said, "In 2002 several of our businesses successfully confronted the severe downturn in commercial aviation, while our Integrated Defense Systems business established itself as a market leader in integrated battlespace solutions and homeland security."

Boeing said its operating earnings were down as a result of decreased commercial airplane deliveries, increased customer financing charges and higher commercial satellite production costs.

The company said its Commercial Airplanes division during 2002 moved aggressively to resize operations and remain profitable. Since September 2001 employment has been reduced by approximately 30,000 people (including Shared Services personnel) and airplane production rates cut in half.

Boeing noted Commercial Airplanes profitably managed through the unprecedented disruption in commercial aviation markets that followed the events of Sept. 11.

In 2002, annual deliveries of commercial airplanes decreased 28 percent and revenues fell 19 percent. The impact of reduced revenues was significantly offset by strong operating performance. Segment, or unit cost, operating margins for the year excluding non-recurring items were 10 percent, just below the 10.1 percent achieved in 2001.

On a program accounting basis, Commercial Airplanes' operating earnings totaled $2 billion, resulting in a 7.1 percent margin in 2002.

This compares to earnings of $1.9 billion in 2001, which include $908 million of non-recurring charges related to the events of Sept. 11. When these charges are added back, Commercial Airplanes earnings calculated on a program accounting basis in 2001 totaled $2.8 billion, resulting in an 8 percent margin.

Fourth quarter deliveries of commercial airplanes decreased 40 percent and revenues fell 32 percent.

Boeing said Commercial Airplanes received 67 gross orders during the quarter and 251 for the year from a broad cross-section of customers. Contractual backlog at quarter-end totaled $68.2 billion compared with $75.9 billion at the end of 2001.

Looking ahead, Boeing also projected it would earn $1.90 to $2.10 a share for the full year 2003 and $2.10 to $2.30 a share in 2004.

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Earnings rise at Exxon Mobil

IRVING, Texas, Jan. 30 (UPI) -- Exxon Mobil Corp., the world's largest publicly traded oil company, said its fourth-quarter net income was lifted by sharply higher oil and gas prices.

The oil giant reported its fourth-quarter net income climbed to $4.09 billion, or 60 cents a share, from $2.68 billion, or 39 cents a share during the same period a year ago.

Excluding special items, the Exxon Mobil reported earnings per share of 56 cents. Analysts on Wall Street had expected the company to post a net income of 50 cents a share, according to Thomson First Call.

Revenue jumped to $56.2 billion from $47.7 billion a year ago.

Exxon Mobil said its upstream exploration and production results rose to $3 billion, up $1.27 billion from a year-ago, helped by crude oil prices that rallied more than 40 percent in the last three months of 2002 from the year before.

The increase in crude prices was driven by fears of a potential war in Iraq, a strike in Venezuela -- the world's fifth-largest exporter of oil -- and increasing U.S. demand for petroleum products during a frigid winter.

Downstream, or refining and marketing, earnings fell to $821 million, down $198 million from the year before, reflecting weaker industrywide conditions. Refiners struggled through last year as high inventories of refined products such as jet fuel and gasoline hurt refining margins.

The company, which is a component of the Dow Jones industrial average, said capital spending rose to $4.03 billion in the fourth quarter from $3.86 billion a year earlier.

On an oil-equivalent basis, production increased 1 percent excluding the effect of OPEC quota restrictions. Liquids production, excluding the effect of OPEC quota restrictions, remained flat during the quarter as new production in Canada, Angola and Equatorial Guinea was offset by natural field decline.

Exxon said natural gas volumes rose 3 percent in the quarter in light of higher European demand and the return to full production levels at Arun in Indonesia.

Chairman Lee R. Raymond said, "ExxonMobil's fourth quarter 2002 net income of $4.09 billion was up $1.45 billion or 55 percent from third quarter 2002 and represents the corporation's highest net income since the second quarter of 2001."

The company said its chemicals earnings fell by $277 million compared with the third quarter due to weaker worldwide margins.

"Corporate and financing expenses of $109 million increased $68 million mainly due to the absence of favorable foreign exchange impacts," Raymond said.