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21 Apr 10. The Boeing Company (NYSE: BA) reported first-quarter net income of $0.5bn, or $0.70 per share, and revenue of $15.2bn. Current period results reflect solid performance across core businesses and a previously disclosed $0.20 charge on health care legislation, while the year-ago quarter was reduced by $0.31 per share on a charge due to poor market conditions in commercial airplanes.

“With clear progress on the 787 and 747-8, solid financial performance and marked improvement in our customer outlook, we continue to draw on the positive momentum we saw at the end of 2009,” said Jim McNerney, Boeing chairman, president and chief executive officer. “Our outlook remains attractive, and we are focused on executing well and delivering on our commitments to customers.”

Earnings guidance for 2010 has been revised to $3.50 to $3.80 per share, incorporating the previously announced charge of $0.20 per share.
Boeing’s quarterly operating cash flow was ($0.3)bn, which reflects continued investment in development programs. Free cash flow* was ($0.5)bn in the quarter.

Total company backlog at quarter-end was $315 bn, with backlogs at
Commercial Airplanes and Defense, Space & Security largely unchanged.
Segment Results

Commercial Airplanes

Boeing Commercial Airplane’s first-quarter revenue was $7.5bn, as fewer planned 747 deliveries and seat supplier challenges resulted in 11 percent fewer airplane deliveries. Operating margin expanded to 9.1 percent on strong operating performance partially offsetting the impact of lower new airplane deliveries. Operating margins for the year-ago quarter were reduced by 4.0 points primarily due to the charge on the 747 program related to a reduction in twin-aisle production rates and unfavorable delivery price escalation forecasts

Commercial Airplanes booked 100 gross orders during the quarter while 17 others were removed from its order book. This contrasts with the year-ago period when cancellations exceeded the 28 gross orders. Contractual backlog remains strong with 3,350 airplanes valued at $250bn, over seven times the unit’s projected 2010 revenue.

Commercial Airplanes Operating Results

First Quarter

(Dollars in Ms) 2010 2009 Change

Commercial Airplanes Deliveries 108 121 (11%)
Revenues $7,468 $8,554 (13%)
Earnings from Operations 679 417 63%
Operating Margins 9.1% 4.9 4.2 Pts

The 787 program continued flight testing during the quarter, as an additional two airplanes joined the two airplanes already in the flight test program. The Dreamliner completed key flight test milestones such as flutter, stall and ground-effect tests. On March 28, the static test unit successfully completed the ultimate load test with a fully pressurized cabin. First delivery is expected in the fourth quarter of 2010. Total firm orders for the 787 at quarter-end were 866 airplanes from 57 customers. The 747-8 program began its flight test program during the quarter, completed initial airworthiness testing, and ended the quarter with three airplanes in the flight test program. Initial delivery is expected in the fourth quarter of 2010.

Boeing Defense, Space & Security

Boeing Defense, Space & Security’s first-quarter revenue was $7.6bn on lower volume in Network & Space Systems, partially offset by favorable aircraft delivery mix and higher volume in services. Operating margins were 8.7 percent on lower margins in military aircraft.

Defense, Space & Security Operating Results

First Quarter

(Dollars in Ms) 2010 2009 Change


Boeing Military Aircraft $3,241 $3,067 6%
Network & Space Systems $2,323 $2,678 (13%)
Global Services & Support $2,049 $1,975 4%
Total BDS Revenues $7,613 $7,720 (1%)

Earnings from Operations


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