Boeing, Caterpillar, Motorola Solutions boost outlooks
BY FRANCINE KNOWLES Business Reporter fknowles@suntimes.com July 25, 2012 8:42AM
This undated handout image provide by the Boeing Company on July 25, 2012 shows a Boeing jetliner with the Aeromexico livery. Aeromexico, Mexico's largest airline, plans to buy 100 airplanes from US aerospace giant Boeing in an almost $11 billion deal, the companies said Wednesday. Grupo Aeromexico has committed to buy a mix of 90 single-aisle 737 MAX 8s and 9s, as well as 10 twin-aisle 787 Dreamliners. "This order represents the largest investment program for a domestic airline in Mexican commercial aviation history and a major step forward in consolidating Grupo Aeromexico's international leadership position," said Grupo Aeromexico's chief executive, Andres Conesa, in a statement. AFP PHOTO/HANDOUT/BOEING = GETTY OUT = = RESTRICTED TO EDITORIAL USE - MANDATORY CREDIT " AFP PHOTO / BOEING " - NO MARKETING NO ADVERTISING CAMPAIGNS - DISTRIBUTED AS A SERVICE TO CLIENTS =HO/AFP/GettyImages
Updated: August 27, 2012 11:06AM
The year is looking rosier for three major Illinois companies as they reported better-than-expected second-quarter earnings Wednesday and improved their outlooks, despite a weakening global economy.
Caterpillar and Chicago-based Boeing’s results shot past analysts’ expectations, lifting their shares and the Dow. Motorola Solutions, the Schaumburg-based seller of police radios and bar-code scanners, said it scored a record second quarter.
Global economic worries haven’t prompted a deluge of Boeing customer deferrals or cancellation of plane orders, according to Chairman and CEO Jim McNerney. He told analysts during a conference call deferrals and cancellations are at or below historical averages.
While the world is “a fragile one economically,” he said about half of the company’s plane orders are replacement airplanes, and airlines view their purchases as having quick payback because the new planes are 20 to 25 percent more efficient.
The company remains on track with the ramp-up of production of its delay-plagued 787 Dreamliner to 10 airplanes per month by the end of 2013, up from the 3.5 it is producing now, McNerney said. The company expects to be at 5 planes per month by the end of this year, he noted.
Boeing reported net income of $967 million, up 3 percent from a year earlier. Its earnings per share were $1.27, up from $1.25; analysts had forecast $1.14. Sales spiked 21 percent to $20 billion on increased commercial airplane deliveries.
The commercial airplane maker and defense industry giant raised its 2012 earnings per share guidance to between $4.40 and $4.60, up from between $4.15 and 4.35. Boeing also raised its revenue guidance to between $79.5 billion and $81.5 billion, up from between $78 billion and $80 billion.
Peoria-based Caterpillar, the world’s largest maker of construction and mining equipment, reported it earned $1.7 billion in the quarter, an increase of 67 percent from the year-ago quarter. Its earnings per share rose to $2.54, an all-time quarterly record, and an increase from $1.52. Analysts surveyed by FactSet expected earnings per share of $2.28. Revenue jumped 22 percent to $17.4 billion.
Caterpillar Chairman and Chief Executive Officer Doug Oberhelman said the company is expecting a record year in 2012.
“Caterpillar’s success in 2012 is coming despite U.S. construction activity that remains depressed and well below the prior peak, the problems facing Eurozone economies and economic concerns in China,” Oberhelman said in a release. “... This doesn’t feel like 2008. Interest rates are low, central banks are prepared to inject more liquidity if needed and housing is coming off lows, not a peak.”
Caterpillar raised its 2012 earnings per share outlook to $9.60 from $9.50, but lowered its revenue guidance to $68 billion to $70 billion from $68 billion to $72 billion.
Motorola Solutions reported operating earnings rose 15 percent and earnings-per-share jumped 30 percent, and it raised its dividend and full-year sales outlook.
Revenue grew thanks to strong demand from the company’s government customers.
“We are growing in every region worldwide, and North America is a tremendous growth area,” CEO Greg Brown said.
Though net income declined from a year ago, that comparison included Motorola Solution’s sale in April 2011 of its networks division to Nokia Siemens Networks — a one-time event.
Motorola Solutions earned $157 million, or 49 cents per share, in the January-March period. The adjusted earnings were 59 cents per share in the latest quarter, up from 54 cents per share a year earlier.
Revenue jumped 7 percent to $1.96 billion from $1.83 billion.
Motorola Solutions now expects its 2012 revenue growth to be as high as 6 percent, up from its previous estimate of 5 percent.
Contributing: AP, Business Reporter Sandra Guy
