-- EPS guidance for 2005 increased
CHICAGO, July 27 /PRNewswire-FirstCall/ -- Financial Highlights: -- Earnings - Q2: $0.70 per share, after $0.09 charge for sale of Wichita and Tulsa operations -- Revenue - Q2: $15.0 billion -- Operating Cash Flow - Q2: $2.7 billion Selected Second-Quarter 2005 Operating Highlights: -- Integrated Defense Systems generated strong revenue growth and outstanding margins through excellent program execution; successfully completed major program milestones on FCS, P-8A (MMA), and the J-UCAS programs; delivered first AH-64 Apache Longbow to Israel; announced joint venture with Lockheed Martin for government launch business. -- Boeing Commercial Airplanes delivered strong performance on deliveries of 85 airplanes; captured 376 gross orders including key wins from customers around the world; concluded sale of Commercial Airplanes' operations in Wichita, KS and Tulsa, OK to Onex; finalized 787 aerodynamic configuration - working toward firm configuration. -- Other Boeing businesses performed well as Boeing Capital continued to improve returns and reduce portfolio risk and Connexion by Boeing(SM) grew availability to more than 100 daily flights. Table 1. Summary Financial Results (Millions, except per 2nd Quarter % Six Months % share data) 2005 2004 Change 2005 2004 Change Revenues $15,028 $13,088 15% $28,015 $25,991 8% Reported Net Income (Loss) $566 $607 (7%) $1,101 $1,230 (10%) Reported Earnings (Loss) per Share(1) $0.70 $0.75 (7%) $1.36 $1.52 (11%) Average Diluted Shares for EPS 807.4 812.3 807.7 811.2 (1) Second-quarter 2005 EPS includes a $0.09 per share charge for the sale of Commercial Airplanes' Wichita and Tulsa operations. Second-quarter 2004 EPS includes a $0.23 per share gain related to interest on a federal tax refund and $0.02 per share gain from the sale of Boeing Capital's commercial finance operations, which is reported as discontinued operations. Six-month 2004 EPS also includes $0.12 related to interest on federal tax refunds in the first quarter of 2004.
The Boeing Company (NYSE: BA) today reported second-quarter 2005 net income of $566 million, or $0.70 per share, on revenues of $15.0 billion. 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.
"Second-quarter results reflect Boeing's focus on strong execution and improved operational efficiency," said Jim McNerney, Boeing Chairman and CEO. "Integrated Defense Systems delivered solid revenue growth and excellent margins driven by strong performance across its broad portfolio of defense, space and intelligence programs. Commercial Airplanes grew revenues by twenty percent and generated solid operating margins while finalizing 376 orders and achieving key milestones on the 787 program. Our cash flow was outstanding and we continued our balanced strategy for cash deployment, including the authorization of a new share repurchase plan and repayment of maturing debt. Due to improving commercial markets and strong operating performance from the Boeing team, we are raising our financial outlook."
The Company's second-quarter earnings from operations increased 26 percent to $0.8 billion (see Table 2) as strong operating performance offset higher non-cash expenses for pensions and share-based plans.
Table 2. Earnings from Operations & Margins (Millions, except 2nd Quarter % Six Months % margin percent) 2005 2004 Change 2005 2004 Change Earnings (Loss) from Operations $810 $644 26% $1,497 $1,468 2% Operating Margin 5.4% 4.9% 0.5 Pts 5.3% 5.6% (0.3 Pts)
Pre-tax (non-cash) pension expense was $155 million, up $77 million or $0.06 per share, from the second quarter of 2004. Share-based-plans expense was $201 million, up $37 million or $0.03 per share, over the same period. Deferred stock compensation expense was $76 million, or $0.06 per share, as the Company's stock price rose 13 percent during the period.
The Company generated $2.7 billion of operating cash flow during the second quarter driven by strong performance in its core businesses. Free cash flow* was $2.2 billion for the quarter (see Table 3).
Table 3. Cash Flow 2nd Quarter Six Months (Millions) 2005 2004 2005 2004 Operating Cash Flow (1, 2) $2,657 $1,254 $4,050 $1,190 Less Property, Plant & Equipment, Additions ($480) ($147) ($787) ($342) Free Cash Flow* $2,177 $1,107 $3,263 $848 (1) After pension contributions totaling $1.0 billion in the second quarter of 2004. The corresponding year-to-date pension contributions for 2005 and 2004 are $0.5 billion and $2.0 billion, respectively. (2) The presentation of operating cash flow for 2004 has been adjusted to include customer financing transactions, which were previously included in investing cash flow. As a result, 2004 second quarter and 2004 six month cash flows have been adjusted downward from previously reported numbers by $0.1 billion and $0.2 billion, respectively. * A complete definition and discussion of Boeing's use of non-GAAP measures, identified by an asterisk (*), is attached at the end of the release.