(AP) - Boeing is building airplanes faster, but Wall Street wants it to build profits faster, too.
Boeing Co. shares dropped more than 5 percent on Wednesday after it said this year's profit and revenue would grow less than analysts had been expecting.
There are a number of reasons. Boeing's defense business is slowing down as governments dial back spending. Some planes slated for delivery in early 2014 were instead delivered late last year- that helped boost Boeing's fourth-quarter profit, but will take away from this year's results. And deliveries of its new 787 are a mixed bag, financially. They bring in cash, but hurt profit margins as Boeing accounts for the money it spent developing the plane.
Boeing predicted 2014 revenue of $87.5 billion to $90.5 billion- at least $2 billion less than expected by analysts surveyed by FactSet.
Orders from airlines around the world have pushed both Boeing and Airbus to build more planes than ever before. Some airlines are buying because newer planes are more fuel efficient, and others- especially in Asia and Latin America- are buying planes because more people can afford to fly.
Boeing has sped production of both its workhorse 737, as well as its new 787. It expects to deliver 110 787s this year, up from 65 last year. Last week Boeing began building 787s at a rate of 10 per month. CEO Jim McNerney said that fewer customers than usual are asking to delay deliveries, "while requests to accelerate deliveries continue at a steady and quite frankly encouraging rate."
McNerney is 64 and is nearing Boeing's usual retirement age of 65. Boeing has said the board can ask its CEO to stay longer. "I'm not planning to retire anytime soon," McNerney said Wednesday on a conference call.
Boeing finished 2013 with a fourth-quarter profit of $1.23 billion, or $1.61 per share, well ahead of analyst expectations. Profits grew in both its commercial airplane and defense businesses.
Revenue rose 7 percent to $23.79 billion.
For all of 2013, Boeing earned $5.96 per share on revenue of $86.62 billion.
A slowdown in U.S. and European military spending has forced Boeing and other defense contractors to overhaul their defense businesses. Boeing has been somewhat shielded from spending cuts because the new tanker jet it is building for the U.S. Air Force, based on its 767 airliner, has avoided cuts.
Boeing said defense revenue rose 2 percent from 2012 to 2013, but could fall almost 10 percent this year.
In afternoon trading, Boeing Co. shares fell $7.59, or 5.5 percent, $129.50. They have backed away from a 52-week high of $144.57 set last week. Boeing is among the 30 companies in the Dow Jones industrial average, and contributed to the Dow's 150 point decline Wednesday.
(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)