Boeing May Peg 787 Profit Benchmark to Output of 1,100 Jets

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  1. ACMM
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    ACMM Gold Member

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    Boeing May Peg 787 Profit Benchmark to Output of 1,100 Jets

    Oct. 25 (Bloomberg) -- Boeing Co. will give investors the first glimpse into the average profit from each 787 Dreamliner tomorrow, with analysts estimating the company will spread costs initially over 1,100 planes.

    That’s the average of 18 estimates compiled by Bloomberg for Boeing’s so-called accounting block for the 787. Boeing uses a practice known as program accounting to determine average profitability rather than posting a loss on early output because of high startup expenses.

    Setting the initial quantity will show how quickly Chicago- based Boeing expects to widen profit margins on the composite- plastic Dreamliner, the company’s fastest-selling model ever. The analysts’ estimates spanned 900 to 1,300 jets.

    A Boeing figure lower than that range “might send a signal that they’re incredibly confident about profitability over a shorter period of time than Wall Street assumed,” said Carter Copeland, a Barclays Capital analyst in New York. A larger number “arguably would shake Wall Street’s confidence about the longer-term profitability profile of the program.”

    Boeing plans a fivefold jump in monthly 787 production to 10 by the end of 2013, a record for a wide-body jet. Meeting that goal would mean that Boeing would need just over a decade to deliver 1,100 planes. About 800 have been ordered so far.
    The 787 “will be profitable on Day One” under program- accounting rules, Chief Executive Officer Jim McNerney said Sept. 26, when the first Dreamliner was turned over to All Nippon Airways Co.

    [From my milePoint enabled iPhone]
     
    Gaucho, canucklehead and uggboy like this.
  2. uggboy
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    uggboy Gold Member

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    We will see how this works out!;)
     
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  3. Gaucho
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    Gaucho Gold Member

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    Creative accounting 101...???
     
  4. milchap
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    milchap Gold Member

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    Creative accounting?
     

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