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BOEING REPORTS LOSS

17 Apr 02. Boeing Co. reported a loss of $1.25bn in the first quarter on Wednesday due to a hefty accounting change and fell well short of Wall Street’s expectations amid the slowdown in aviation since Sept. 11.

Despite what it called a strong operating performance in its core aerospace and finance businesses, Boeing was hurt by weakness in its commercial satellite operation and continuing fallout from the terrorist attacks.

In early trading on the New York Stock Exchange, Boeing shares sank 3.1 percent, or $1.53 a share, to $47.17.

The biggest setback was a non-cash charge of $1.83bn, primarily for goodwill related to the October 2000 acquisition of the satellite-making holdings of Hughes Electronics Corp. Boeing had warned it would take the charge to comply with new accounting rules governing the amortization of goodwill, or the amount above fair value that a company is allowed to carry on its books after paying an acquisition premium. The net loss amounted to $1.54 a share for the January-March period, (2001: $1.24bn, or $1.45 a share).

First quarter net earnings of $602m, or $0.75 per share, on $13.8bn of revenues, excluding non-recurring items and the impact of adopting a new accounting standard related to goodwill, (2001: $761m or $0.89 per share on $13.3bn of revenue).

Boeing’s financial results include the impact of stock compensation expenses which reduced first quarter earnings per share by $0.13 and $0.02 during the same period last year. When stock compensation expenses are excluded, along with non-recurring items and changes in accounting, earnings per share totalled $0.88 in the first quarter of 2002 compared with $0.91 per share in 2001. Excluding non-recurring items, operating earnings and margins for the period totaled $1.0bn and 7.4 percent, respectively, (2001: $1.2bn and 9.2 percent).

Total backlog at the end of the quarter was $131.1bn, (2001: $134.1bn). Contractually committed backlog was up to $110.2bn, (2001: $106.6bn).

Revenues for Military Aircraft and Missile Systems first quarter increased 22 percent to $3.0bn, (2001:$2.4bn). Aircraft, rotorcraft, and tactical weapons program deliveries were all higher, as were revenues from military aerospace support. Operating performance continued to be strong as segment earnings and operating margins, excluding the benefit of a non-recurring item, totalled $339m and 11.4 percent, respectively, (2001: $246m and 10.1 percent). Contractual backlog at the end of the quarter totalled $22.5bn, (2001: $17.6bn).

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