BE Aerospace CEO Sees Weak 787 Delivery Outlook For 2011
December 01 2010 - 11:47AM
Dow Jones News
A leading supplier on the delayed Boeing Co. (BA) 787 aircraft
program said Wednesday that the outlook for deliveries next year
"does not look particularly strong."
Suppliers have privately expressed doubts that Boeing will
deliver few if any operational 787s next year in the wake of an
onboard fire on a plane last month that grounded the test fleet.
Boeing has said it will outline the impact on the delivery schedule
in a few weeks. The first delivery is officially set to arrive in
February.
"The outlook for 787 deliveries in 2011 does not look
particularly strong," said Amin Khoury, chairman and chief
executive of BE Aerospace Inc. (BEAV), the world's largest supplier
of aircraft interiors.
Khoury, speaking at an investor conference, said that less than
5% of its 2011 profit guidance hinged on the 787 schedule, a margin
he described as "just noise."
The U.S. company sees per-share earnings of $1.90 to $1.95 next
year on a 20% rise in revenue to $2.4 billion.
Khoury said a key growth area for BE Aerospace has been power-
and thermal- management systems. Commercial aircraft became "more
electric," moving away from hydraulics to move plane controls and
incorporating more sophisticated passenger amenities.
"There is a secular effect that's going on, with more and more
power packed into smaller spaces," he said.
BE Aerospace has been expanding through acquisitions in the
power-management space; however, it didn't produce the P100
electrical panel, traced as the source of the Nov. 9 fire on the
787 test plane. That was made by France's Zodiac Aerospace (ZODFY,
ZC.FR).
Suppliers and 787 customers are in negotiations with Boeing over
the delays to the 787 program, whose first delivery is already
running three years behind schedule. Suppliers are seeking
compensation for inventory and parts built up in anticipation of
rising production of the plane.
BE Aerospace shares were recently up 2.1% at $36.25. Boeing
shares rose 1.5% to $64.71.
-By Doug Cameron, Dow Jones Newswires; 312-750-4135;
doug.cameron@dowjones.com
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