Boeing Reports Second-Quarter Financial Results, Reaffirms Guidance

- Second-quarter revenues steady at $17.0 billion - Net income was $0.9 billion with EPS of $1.16 per share, including a previously disclosed charge of $0.22 per share - First-half EPS grew 13 percent to $2.79 per share as revenue grew 2 percent to $33.0 billion - Backlog at record $346 billion - 2008 and 2009 financial guidance reaffirmed

    CHICAGO, July 23 /PRNewswire-FirstCall/ --

    Table 1. Summary Financial
     Results
    (Millions, except    2nd Quarter                First Half
     per share data)   2008      2007    Change   2008      2007    Change
    Revenues         $16,962   $17,028    (0%)  $32,952   $32,393      2%
    Earnings From
     Operations       $1,247    $1,506   (17%)   $3,046    $2,815      8%
    Operating Margin    7.4%      8.8%  (1.4)Pts    9.2%      8.7%   0.5 Pts
    Reported Net
     Income             $852    $1,050   (19%)   $2,063    $1,927      7%
    Reported Earnings
     per Share         $1.16     $1.35   (14%)    $2.79     $2.48     13%
    Operating Cash
     Flow              ($251)    $3,634    N.A.   $1,682    $4,362   (61%)

The Boeing Company's (NYSE: BA) second-quarter earnings per share decreased 14 percent to $1.16 per share, on revenue of $17.0 billion and an operating margin of 7.4 percent. Results were affected by the previously disclosed charge for the Airborne Early Warning & Control (AEW&C) program and lower profitability due to mix and timing in Commercial Airplanes, partially offset by lower centralized costs (Table 1).

For the first half of 2008, revenue grew 2 percent to $33.0 billion, operating margin grew to 9.2 percent, net income rose 7 percent to $2.1 billion, and earnings per share increased 13 percent to $2.79 per share, despite the AEW&C charge. Results reflected good performance in the company's core businesses and lower unallocated costs.

Boeing reaffirmed its 2008 earnings per share guidance of between $5.70 and $5.85 as well as its 2009 earnings per share guidance of between $6.80 and $7.00.

"While we faced some challenges this quarter that affected our results, we remain confident in our outlook for the remainder of this year and 2009," said Chairman, President and CEO Jim McNerney. "Strong global demand for our products and services, a record backlog, and a sustained focus on productivity improvement and execution will continue to drive growth and profitability for this company."

Second-quarter operating cash flow was ($0.3) billion, reflecting a planned increase in working capital requirements, mostly inventory for 787 (Table 2). First-half operating cash flow was $1.7 billion, and free cash flow* was $0.9 billion. Total company backlog at quarter-end was $346 billion, up 6 percent year-to-date driven by commercial airplane orders.


     Table 2. Cash Flow         2nd Quarter                First Half
    (Millions)               2008         2007         2008         2007
    Operating Cash Flow (1) ($251)       $3,634       $1,682       $4,362
    Less Additions to
     Property, Plant &
     Equipment              ($398)        ($414)       ($807)       ($865)
    Free Cash Flow*         ($649)       $3,220         $875       $3,497

    (1) Operating cash flow includes $517 in pension plan contributions in
        first half of 2008 and $523 in first half 2007, both mostly in 1Q.
    *   Non-GAAP measure. A complete definition and reconciliation of Boeing's
        use of non-GAAP measures, identified by an asterisk (*), is found on
        page 8, "Non-GAAP Measure Disclosure."


Cash and investments in marketable securities totaled $10.2 billion at quarter-end, down from the end of the first quarter but essentially unchanged from the same period last year (Table 3). During the quarter, the company returned $1.2 billion to shareholders by repurchasing 11.0 million shares for $859 million and paying $300 million in dividends. Share repurchases in the first half totaled $2.1 billion for 26.6 million shares.


    Table 3. Cash, Marketable Securities and Debt Balances
                                                            Quarter-End
    (Billions)                                          2Q08           1Q08
    Cash                                                $5.6           $7.7
    Marketable Securities(1)                            $4.6           $4.4
      Total                                            $10.2          $12.1
    Debt Balances:
    The Boeing Company                                  $3.9           $3.9
    Boeing Capital Corporation                          $4.3           $4.3
      Total Consolidated Debt                                        $8.2                      $8.2

        (1)  Marketable  securities  consists  primarily  of  investments  in
                high-quality  fixed-income  and  asset-backed  securities  classified  as
                "short-term  investments"  and  "investments."  At  June  30,  2008,  it  also
                includes  time  deposits  of  $1.2  billion  and  commercial  paper  of  $0.2
                billion  classified  as  "short-term  investments."  At  March  31,  2008,  it
                also  included  time  deposits  of  $1.5  billion  and  commercial  paper  of
                $0.1  billion  classified  as  "short-term  investments."


        Segment  Results
        Commercial  Airplanes 


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