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Technology Stocks : Boeing keeps setting new highs! When will it split? -- Ignore unavailable to you. Want to Upgrade?

To: Yaacov who wrote (2274)	5/23/1999 5:23:00 AM
From: Neil H	Read Replies (1) \| Respond to of 3764

Interview excerpt from Barrons Q: Okay, tell us about Boeing. A: The company derives about 60% of its revenues from commercial aircraft, the other 40% from defense and space operations. While production of the 737, 747 and 777 commercial airliners may plateau in the next year, we believe profitability will improve substantially, with after-tax profit margins rising to 5% by 2000-2001 from just under 2% last year. This would mitigate the impact of lower output. In a recent interview in The Wall Street Journal, Boeing Chairman Phil Condit said that declining Asian demand for jetliners seems to have bottomed out, and that last year's fears of a deeper drop are evaporating (Boeing CEO Sees a Bottoming of Demand From Asian Firms, May 18). We believe the commercial-aircraft cycle may turn upward in late 2000. This should provide significant profit potential for a leaner Boeing, which plans to lay off up to 7,000 workers in St. Louis by mid-2001 after losing an order for F-15 jet fighters. We also believe Boeing should enjoy significant benefits from the fiscal 2000 U.S. defense budget. The combination of an upturn in commercial-aircraft orders and additional military business will come as a major surprise to many analysts. Q: How does the trend of earnings look? A: Boeing earned $1.15 a share last year. We see $2 in 1999 and somewhere close to $2.50 the following year. Based on present orders, potential earning power is $3 over the next few years, with little downside risk. This number could be higher if, as we believe, Boeing achieves a big win over Airbus in the next generation of much larger jumbo jets. Q: And the stock? A: Recently 46, it could hit 60 in six-to-nine months, and 85-90 in 12-18 months. Regards Neil