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SOUND RESULTS FROM U.S. MAJORS

27 Jul 05. The Boeing Company (NYSE: BA – News) today reported second-quarter 2005 net income of $566m, or $0.70 per share, on revenues of $15.0bn. Strong operating results offset primarily non-cash charges totaling $0.09 per share related to the sale of the Commercial Airplanes’ operations in Wichita and Tulsa to Onex. Second-quarter 2004 earnings of $0.75 per share included a $0.23 per share benefit from interest on a tax refund.

The Company’s second-quarter earnings from operations increased 26
percent to $0.8bn as strong operating performance offset higher non-cash expenses for pensions and share-based plans. The Company’s cash balance at quarter-end totaled $4.9bn, up from $3.3bn at the end of the first quarter. The cash balance reflected strong operating cash flows and cash received from the sale of the Commercial Airplanes operations in Wichita and Tulsa, which offset cash used for the Company’s on-going share repurchase program, to repay maturing debt and to support planned increases in investment in Boeing’s core businesses. The combination of cash and marketable securities totaled $7.9bn at the end of the second quarter, up from $6.3bn at the end of the first quarter. The Company repurchased 10.3 million shares during the quarter for $646m and announced a new share repurchase program for up to 40 million shares. Boeing Company debt fell to $3.9bn as $0.5bn of debt matured during the quarter. Boeing Capital debt dropped to $6.5bn as strong operating cash flow eliminated the need for new financing.

Integrated Defense Systems (IDS) delivered strong growth and outstanding profitability as its defense, space and intelligence businesses continued to perform well in healthy markets. IDS results are summarized in Table 5. During the second quarter, IDS revenues increased 8 percent to $7.7bn as all four segments generated growth. IDS produced second- quarter operating margins of 10.5 percent, up from 9.7 percent in the second quarter of 2004 driven by double-digit margins in the Aircraft and Weapon Systems and Support Systems segments.

Network Systems revenues rose 3 percent to $2.8 billion on increased activity in Future Combat Systems, 737 Airborne Early Warning and Control, and Multi-mission Maritime Aircraft, which offset lower volume in proprietary, homeland security and missile defense programs. Operating margins declined to 6.1 percent, as revised cost and fee estimates in the proprietary area and on the 737 AEW&C program offset earnings from higher revenues. Aircraft and Weapon Systems delivered excellent profitability in the second quarter. Revenues rose 15 percent to $3.1bn primarily driven by the timing of C-17, F-15, C-40, T-45 and JDAM deliveries. Operating margins were 14.3 percent driven by strong performance across key programs including C-17, F/A-18 and Rotorcraft.

Support Systems generated very strong profitability on its broad business base during the second quarter. Revenues rose 3 percent to $1.2bn driven by increased volume in support services. Operating margins grew to 15.1 percent on strong program performance across the segment.

28 Jul 05. Northrop Grumman Corp. said Thursday its second-quarter profit jumped 23 percent, beating Wall Street estimates, as sales rose 7 percent. The company also raised its outlook for the year.Net income rose to $367m, or $1 per share, from $298m, or 82 cents per share, a year ago. Revenue increased to $7.96bn from $7.44bn and the company said each business segment posted higher sales. Contract acquisitions were $5.6bn in the second quarter, compared with $5.4bn a year ago. Analysts expected earnings of 88 cents per share on sales of $7.81bn. Northrop Grumman said it now expects 2005 earnings from continuing operations of $3.90 to $4 per share. In May, Northrop Grumman predicted year-end earnings of $3.70 to $3.85 per share. The company left its sales forecast unchanged at between $31bn and $31.5bn. Analysts expect 2005 earni

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