SEATTLE _ Reacting to a growing industry expectation that 777 jet production will have to be reduced further than previously stated, Boeing said Wednesday that the worst case scenario is a rate cut to 42 jets per year from the current 100 jets per year.
Chief executive Dennis Muilenburg said in a teleconference that a decision will likely be made by year-end whether to cut production below the previous target of 66 deliveries in 2018.
That's 5.5 jet deliveries per month. Muilenburg said that Boeing, which has a large presence in the Seattle area, still hopes to win more 777 orders this year and, depending on the outcome of several ongoing sales campaigns, it may maintain that rate or cut it to as low as 3.5 jets per month.
If that happens, Muilenburg said the financial impact would be "offset by other actions."
Though he didn't clarify what actions he was referring to, presumably one element would be cutting jobs in the Seattle area to match the reduced production rate.
Muilenburg said that if needed a further rate cut would be implemented "in late 2017 or early 2018."
The 777 production rate is under severe pressure due to a downturn in the global airplane business that has particularly hit sales of large widebody jets.
Meanwhile, Boeing's current financial performance remains buoyant.
Third-quarter profit rose 34 percent, including a large positive tax adjustment, and the company raised its forecast for 2016 earnings, revenue and airplane deliveries.
Boeing said it earned $2.28 billion in profit, up from $1.70 billion a year ago, even though revenue declined 7.5 percent.
Excluding one-time items and the tax adjustment that had not previously been disclosed, the core profit margin was $2.81 per share. That beat the average forecast of $2.62 per share from analysts surveyed by CapitalIQ.
Revenue fell to $23.9 billion in the quarter but also beat the forecast of $23.6 billion.
Boeing executives also raised the outlook slightly for the full year.
They said they expect full-year earnings from core businesses to range between $6.80 and $7 per share, an increase of 70 cents to reflect the previously unannounced tax-basis benefit.
Boeing forecast revenue between $93.5 billion and $95.5 billion, an increase of $500 million from a previous prediction.
Boeing expects to deliver 745 to 750 airliners this year, up five from its previous prediction.
The company delivered 563 nonmilitary planes in the first nine months of 2016, including 188 in the third quarter.
While that pace is down slightly from 2015, the company still has a huge backlog of orders _ for more than 5,600 planes. It added 107 orders in the third quarter.
Boeing's stock was up $5.42, or 3.9 percent, to $144.44 in early afternoon trading in New York on Wednesday.
