Boeing Reports Third-Quarter Financial Results

Total company backlog at quarter-end was $320 billion, down 2 percent in the quarter, as backlog for both Commercial Airplanes and Integrated Defense Systems declined during the period.

Segment Results

Commercial Airplanes

Boeing Commercial Airplanes (BCA) third-quarter revenues increased 13 percent to $7.9 billion on higher deliveries partially offset by lower services volume, while last year's revenues were affected by a labor strike and supplier production problems. The current period operating loss of $2.8 billion reflects the previous 787 and 747 announcements mentioned above. R&D expense includes the $2.5 billion reclassification of costs incurred through July on the first three 787 flight test airplanes and $138 million of spending on those airplanes in August and September. The 747 forward-loss of $1.0 billion is due to increased production costs and difficult market conditions (Table 4).

For the first nine months of 2009, revenues rose to $24.9 billion on increased airplane deliveries, partially offset by lower volume in services. Operating earnings fell to a loss of $1.6 billion driven by the 787 and 747 impacts.


    Table 4. Commercial Airplanes Operating Results

                            Third Quarter               Nine Months
                            -------------               -----------
    (Dollars in Millions)    2009     2008  Change     2009      2008  Change
    ---------------------    ----     ----  ------     ----      ----  ------

    Commercial Airplanes
     Deliveries               113       84      35%     359       325      10%

    Revenues               $7,883   $6,946      13% $24,868   $23,674       5%
    Earnings/(Loss)
     from Operations      ($2,837)    $394      NA  ($1,603)   $2,154      NA

    Operating Margins       (36.0%)    5.7%     NA     (6.4%)     9.1%     NA
    -----------------       -----      ---      --     ----       ---      --

BCA booked 96 gross orders during the quarter while 17 others were removed from its order book. Contractual backlog was $254 billion, more than seven times BCA's expected 2009 revenues.

The 787 program has begun the previously announced reinforcement to an area within the side-of-body joint. First flight of the airplane remains on track to occur by the end of 2009, with first delivery scheduled for the fourth quarter of 2010. The company also recently completed its acquisition of the 787 production facility in South Carolina from Vought. Total firm orders are now 840 airplanes from 55 customers, including the previously disclosed ten-unit cancellation that occurred after quarter-end.

Integrated Defense Systems

Boeing Integrated Defense Systems (IDS) third-quarter revenues rose 3 percent to $8.7 billion on increased military aircraft deliveries and higher volume in services. Operating margins were 10.1 percent reflecting strong performance in Boeing Military Aircraft and Network & Space Systems (Table 5).

For the first nine months of 2009, IDS revenues increased by 5 percent to $25.1 billion on growth in Military Aircraft and Global Services segments as operating margins were 9.8 percent, increasing earnings 5 percent to $2.5 billion.


    Table 5.  Integrated Defense Systems Operating Results

                           Third Quarter              Nine Months
                           -------------              -----------
    (Dollars in Millions)   2009    2008  Change      2009     2008  Change
    ---------------------   ----    ----  ------      ----     ----  ------

    Revenues
       Boeing Military
        Aircraft          $3,951  $3,702       7%  $10,324  $10,169       2%
       Network & Space
        Systems           $2,711  $2,987      (9%)  $8,492   $8,485       0%
       Global Services &
        Support           $2,082  $1,808      15%   $6,298   $5,352      18%
                          ------  ------            ------   ------
    Total IDS Revenues    $8,744  $8,497       3%  $25,114  $24,006       5%

    Earnings from
     Operations
       Boeing Military
        Aircraft            $486    $388      25%   $1,160     $929      25%
       Network & Space
        Systems             $252    $302     (17%)    $698     $806     (13%)
       Global Services &
        Support             $147    $164     (10%)    $612     $616      (1%)
                            ----    ----              ----     ----
    Total IDS Earnings
     from Operations        $885    $854       4%   $2,470   $2,351       5%

    Operating Margins       10.1%     10.1%      -Pts              9.8%          9.8%      -Pts
 


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