Chicago based, US aerospace and defence giant The Boeing Company reported earnings of $1,160 million, a massive 12% jump in its third-quarter profit compared to $1,030 million from the same period a year ago. The company has also raised its 2013 financial performance outlook, based on an increase in commercial aircraft deliveries.
Key highlights of the quarter
- Core Earnings Per Share (non-GAAP)* rose 16% to $1.80 on strong operating performance; GAAP EPS of $1.51
- Revenue increased 11% to $22.1 billion reflecting higher commercial deliveries
- Backlog grew to a record $415 billion, including $27 billion of net orders during the quarter
- Operating cash flow before pension contributions increased to $4.3 billion
- 2013 Core EPS guidance increased to between $6.50 and $6.65 (previously forecast of $6.20 to $6.40); GAAP EPS to between $5.40 and $5.5
Boeing Chairman, President and CEO Jim McNerney said
“Consistently strong operating performance is driving higher earnings, revenue and cash flow as we deliver on our record backlog and return increased value to shareholders,” “During the quarter, Commercial Airplanes completed the first flight of the 787-9 and delivered 170 airplanes, while Defense, Space & Security maintained solid performance and captured $7 billion in new orders. Despite the uncertainty of the U.S. defense market, overall our customer-focused business strategies and disciplined execution on our programs are producing the results we expect, and our strong year-to-date performance and positive outlook allow us to increase our 2013 guidance for earnings and operating cash flow.”
Boeing Commercial Airplanes was the star performer with third-quarter profits of $1,620 million, up 40%, on revenue of $14 billion, and operating margin improving to 11.6%. During the quarter, the 787-9 completed first flight. The company intends to increase the 787 production rate from 10 to 12 per month in 2016, and to 14 per month before the end of the decade. The division booked 200 net orders during the quarter with a backlog of nearly 4,800 airplanes valued at $345 billion.
Boeing Defense, Space & Security’s third-quarter revenue was $8 billion ($8,000 million), while operating margin was 8.4%. Profits fell by 19%, mainly due to a profit fall of 48% in Boeing Military Aircraft (BMA) whose third-quarter revenue was $3.5 billion, primarily reflecting lower delivery volume. Operating margin at BMA decreased to 6.2%, impacted by mix and one-time charges on the F-15 and C-17 programs. During the quarter, BMA was awarded a low-rate initial production award for 13 P-8A Poseidon aircraft.
Network & Space Systems (N&SS) third-quarter revenue was $2.2 billion, reflecting higher sales of Delta inventory and revenue in the Space Launch System program, and operating margin was 8.7%. During the quarter, N&SS was awarded a contract by Mexico’s Satmex for an additional 702 small satellite.
Global Services & Support (GS&S) third-quarter revenue was $2.3 billion, due to higher volume in maintenance, modifications and upgrades. Operating margin was 11.4%. During the quarter, GS&S achieved first flight on the QF-16 unmanned aircraft and was also awarded a contract by the U.S. Air Force for 56 additional replacement wings for the A-10 aircraft.
Backlog at Defense, Space & Security was $70 billion, of which 38% represents orders with international customers.