Boeing Reports Third-Quarter Financial Results

CHICAGO, Oct. 21 /PRNewswire-FirstCall/ --

    --  Third-quarter revenue was $16.7 billion, 9 percent higher than last
        year's strike-affected quarter
    --  Loss of $2.23 per share reflects $3.59 per share of expenses related to
        previously announced 787 cost reclassification and 747 charge, partially
        offset by solid performance in other commercial programs and the defense
        business
    --  Operating cash flow increased to $1.2 billion
    --  Backlog at $320 billion - nearly five times current annual revenues
    --  2009 guidance updated for 787 cost reclassification and 747 charge

    Table 1.  Summary Financial Results
                           Third Quarter               Nine Months
                           -------------               -----------
    (Dollars in
     Millions, except
     per share data)        2009      2008  Change     2009     2008  Change
    -----------------       ----      ----             ----     ----

    Revenues             $16,688   $15,293       9% $50,344  $48,245       4%
    Earnings/(Loss) From
     Operations          ($2,151)   $1,147      NA     $403   $4,193      NA
    Operating Margin       (12.9%)     7.5%     NA      0.8%     8.7%     NA
    Net Income/(Loss)    ($1,564)     $695      NA      $44   $2,758      NA
    Earnings/(Loss)
     per Share            ($2.23)    $0.96      NA    $0.06    $3.76      NA
    Operating Cash Flow   $1,197     ($442)     NA   $2,391   $1,240      93%

The Boeing Company (NYSE: BA) reported a third-quarter net loss of $1.6 billion, or $2.23 per share, as revenues rose 9 percent to $16.7 billion. Current period results reflect the previously announced reclassification to research and development (R&D) of costs incurred through July for the first three 787 flight-test airplanes ($2.46 per share), spending on those planes for August and September ($0.14 per share), and the 747 charge ($0.99 per share), partially offset by solid performance in other commercial airplane programs and the company's defense business (Table 1). Last year's strike and supplier production problems reduced year-ago revenue by an estimated $2.1 billion and earnings by an estimated $0.60 per share.

Revenues for the first nine months of 2009 rose 4 percent to $50.3 billion due to higher commercial deliveries and growth in the defense segment. Earnings for the first nine months declined to $0.06 per share, including the third-quarter impacts described above and a first-quarter $0.38 per share impact from reductions to future twin-aisle production rates and lower delivery price escalation forecasts in Commercial Airplanes.

Earnings guidance for 2009 has been adjusted to between $1.35 and $1.55 per share, from $4.70 to $5.00, to reflect the 787 and 747 impacts.

"The 787 cost reclassification and the 747 charge for increased costs and difficult market conditions clearly overshadowed what continues to be otherwise solid performance across our commercial production programs and defense business," said Boeing Chairman, President and Chief Executive Officer Jim McNerney. "We look forward to getting the 787 and 747-8 in the air soon and moving forward with flight test and certification for these two important programs."

Boeing's quarterly operating cash flow was $1.2 billion, which includes higher cash receipts than the year-ago period partially offset by continued investment in development programs (Table 2). For the first nine months of 2009, operating cash flow was $2.4 billion. Free cash flow* was $1.0 billion in the quarter and $1.4 billion year-to-date.

    Table 2.  Cash Flow
                                    Third Quarter    Nine Months
                                    -------------    -----------
    (Millions)                       2009   2008    2009     2008
    ----------                       ----   ----    ----     ----

    Operating Cash Flow(1)         $1,197  ($442) $2,391   $1,240
       Less Additions to Property,
        Plant & Equipment           ($229) ($422)  ($965) ($1,229)
                                    -----  -----   -----  -------
    Free Cash Flow*                  $968  ($864) $1,426      $11
    ----------------                 ----  -----  ------      ---

    (1) Operating cash flow for third quarter of 2009 includes a $60 million
        contribution to pension plans.  Operating cash flow for the first nine
        months includes a $60 million contribution to pension plans in 2009
        and $531 million in 2008.
    * 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 $6.6 billion at September 30, up 31 percent from the end of the second quarter. The cash position was improved by the issuance of $1.95 billion in debt partially offset by investing cash flows of $1.0 billion for the purchase of 787 facilities in South Carolina and payment of Sea Launch guarantees (Table 3). The company did not acquire any of its shares in the quarter.


    Table 3.  Cash, Marketable Securities and Debt  Balances
                                                                                                                          Quarter-
                                                                                                                                End
                                                                                                                          --------
        (Billions)                                                                                              3Q09  2Q09
        ----------                                                                                              ----  ----
        Cash                                                                                                          $6.1  $4.6
        Marketable  Securities(1)                                                                  $0.5  $0.4
                                                                                                                          ----  ----
              Total                                                                                                  $6.6  $5.0

        Debt  Balances:
        The  Boeing  Company                                                                              $7.6  $5.7
        Boeing  Capital  Corporation                                                              $3.4  $3.4
                                                                                                                          ----  ----
              Total  Consolidated  Debt                                                            $11.0  $9.1
        --------------------------                                                            -----  ----
        (1)  Marketable  securities  consists  primarily  of  investment-grade
                instruments  classified  as  "short-term  investments"  and
                "investments."
 


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