Boeing shrugs off Trump trade fears, reports solid earnings

NEW YORK: Boeing reported solid fourth- quarter earnings and forecast higher commercial airplane deliveries in 2017, while its chief dismissed fears US President Donald Trump could start a trade war.

The US aerospace giant saw a 59 percent surge in earnings to US$1.6 billion compared with final quarter of the prior year, beating expectations.

The jump was due to higher commercial aircraft deliveries and a one-time charge in late 2015 that made the comparison more favorable.

Boeing also said it expects commercial deliveries in 2017 to rise to between 760 and 765 aircraft this year, up from 748 in 2016, as the firm works through a backlog of orders. Deliveries are tied to revenues and closely monitored by Wall Street.

The report sparked a 5.0 percent rise in Boeing shares to US$168.43 at midday, helping to propel the Dow Jones Industrial Average above the 20,000-point milestone for the first time.

Investors shrugged off some negative aspects of the Boeing results, including US$ 312 million in new unexpected costs for KC- 46 military tanker program, another in what has been a recurring theme in recent the company’s earnings reports.

The report came as the new Trump administration puts its stamp on US policies and openly pressures companies in its ‘America First’ agenda that has sparked worries of protectionism.

Boeing felt the sting of his Twitter attack in December, when Trump lambasted the company for what he said were runaway costs of the next generation presidential plane, to serve as the famed Air Force One.

Boei ng chie f Denni s Muilenburg, who met with Trump twice prior to his inauguration and pledged to work to control costs on Air Force One, said he was confident the new president’s agenda would be good for Boeing and that the US would avoid a trade war.

“This is all about helping business being successful,” Muilenburg said in a call with reporters and analysts, adding that he was ‘ very confident’ the new administ rat ion understands the importance of not alienating China, an important Boeing market.

Muilenburg endorsed progrowth policies such as lower taxes and ‘ fair trade’ for the United States, and said higher US defense spending could boost Boeing’s business. — AFP