U.S. MAJORS SHOW RESILIENCE
The reporting season kicked off in earnest this week with all the U.S. majors reporting resilience in earnings with no surprises announced!
The Boeing Company
24 Jul 13. The Boeing Company (NYSE: BA) reported second-quarter core earnings per share (non-GAAP) increased 13 percent to $1.67, driven by strong performance across the company’s businesses. Second-quarter core operating earnings (non-GAAP) also increased 13 percent* to $2.0bn from the same period of the prior year. Second-quarter revenue was $21.8bn, GAAP earnings from operations was $1.7bn and earnings per share was $1.41. Core earnings per share guidance increased to between $6.20 and $6.40 and GAAP earnings per share guidance increased to between $5.10 and $5.30, reflecting the strong performance. The company also increased its revenue guidance to between $83 and $86 bn on higher Defense, Space & Security revenues, and reaffirmed its 2013 operating cash flow outlook.
“Continued strong core operating performance drove higher earnings, revenue and operating cash flow during the quarter, and we returned significant value to shareholders through share repurchases and increased dividends,” said Boeing Chairman, President and CEO Jim McNerney. “We also further strengthened our market-leading position in commercial airplanes with the successful launch of the 787-10 and $40 bn of new orders, while our defense, space and security business delivered improved margins and market share in a tough market. Overall, our strong first-half performance and positive outlook allows us to raise our 2013 earnings and revenue guidance, and our team remains intensely focused on execution, productivity and quality to meet our customer commitments and further drive growth.”
Segment Results
Commercial Airplanes
Boeing Commercial Airplanes second-quarter revenue increased to $13.6bn on higher delivery volume. Second-quarter operating margin improved to 10.7%, reflecting lower R&D and the higher deliveries partially offset by the dilutive impact of 787 deliveries. During the quarter, the company completed the retrofit of 787 battery enhancements on previously delivered airplanes and delivered sixteen 787 airplanes. Also during the quarter, the 787-9 Dreamliner began final assembly and the launch of the 787-10 was announced. Commercial Airplanes booked 481 net orders during the quarter. Backlog remains strong with nearly 4,800 airplanes valued at a record $339bn.
Boeing Defense, Space & Security
Boeing Defense, Space & Security’s second-quarter revenue was $8.2bn, while operating margin was 9.5 percent.
Boeing Military Aircraft (BMA) second-quarter revenue was $3.9bn, primarily reflecting lower delivery volume. Operating margin increased to 9.6 percent, as the prior year included an inventory adjustment on A-160. During the quarter, BMA was awarded CH-47 Chinook and V-22 Osprey multi-year contracts.
Network & Space Systems (N&SS) second-quarter revenue was $2.0bn, reflecting higher revenue in commercial satellites and the Space Launch System program. Operating margin was 6.7 percent, reflecting lower earnings in electronic & information solutions. During the quarter, N&SS was awarded a contract by ViaSat to design and deliver one 702HP spacecraft and was also awarded a contract for four 702MP satellites for Intelsat S.A.
Global Services & Support (GS&S) second-quarter revenue was $2.2bn, due to higher volume in maintenance, modifications & upgrades. Operating margin was 11.8 percent, reflecting strong performance. During the quarter, GS&S was awarded a contract by the Royal Netherlands Air Force for maintenance and spare parts for Chinook and Apache helicopters.
Backlog at Defense, Space & Security increased to $71 bn, of which 37 percent represents orders with international customers.
Additional Financial Information
Boeing Capital Corporation
At quarter-end, Boeing Capital Corporation’s (BCC) net portfolio balance w