WASHINGTON — Seattle-based Boeing Co.’s prospects beyond 2001 are clouded by a slowing demand for commercial aircraft, which may force the company to rely more on its military and space businesses to sustain the earnings gains made in 2000, according to Deutsche Banc Alex. Brown, an investment research firm.
In a Jan. 18 release, the New York-based firm downgraded its investment rating for
The investment downgrade is based on projections that commercial aircraft sales will hold steady through 2001 and decline slightly in 2002, Chris Mecray, an analyst at Deutsche Banc, told Spacenews.com Jan. 18.
In a Jan. 17 statement accompanying the release of its 2000 earnings, Boeing revealed a 19-percent drop in commercial aircraft revenues. It predicted sales in this sector would hold constant through 2002.
Mecray emphasized sales of military aircraft and missile systems, as well as space and communications technology could constitute a higher percentage of Boeing’s overall revenues if the commercial sector does not improve or becomes increasingly sluggish.
The Deutsche Banc report noted sales of military aircraft and missile systems for Boeing were approximately $12.1 billion in 2000, on par with the company’s revenues the previous year. However, the report predicted Boeing would experience net gains in this sector in 2001, thanks to the company’s long-term contracts for F/A-18 fighters, C-17 transport aircraft, AH-64D Apache Longbow helicopters and T-45 trainer aircraft.
Net revenues from the defense and space sectors are expected to increase from $20.2 billion in 2000 to $23.2 billion in 2001, said Mecray.
While "it is too early to say what...the program-by-program outlook will be" under the new administration of President-elect George W. Bush, Boeing looks forward to a net gain in the value of federal defense contracts given the
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