Boeing Exceeds Expectations, Profits Up 13% to $2-B in 2Q
Chicago, Ill., July 25, 2013--Boeing Co. reported second-quarter profit increased 13 percent to US$ 2.0 billion from the same period last year driven by strong performance across the company's businesses, particularly sales of sales of commercial airplanes and exports of military equipment.
The unexpected higher increase in profits translates to 13 percent core profit earnings per share to US$1.67, prompting the company to raise forecasts for all of 2013. Boeing now projects earnings of $5.10 to $5.30 a share for the year, an increase from an earlier estimate of $5 to US$ 5.20 a share. It also expects revenue of US$ 83 billion to US$ 86 billion, compared with its earlier forecast for US$ 82 billion to US$ 85 billion.
Boeing said second-quarter revenue increased 9 percent to $21.8 billion reflecting higher deliveries on the 787 and 737 programs as backlog grew to a record US$ 410 billion, including US$ 40 billion of net orders during the quarter.
“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 $40 billion of new orders, while our defense, space and security business delivered improved margins and market share in a tough market,” he said.
Operating cash flow in the quarter was US$ 3.5 billion, reflecting higher commercial airplane production rates, strong core operating performance and timing of receipts and expenditures. Boeing Commercial Airplanes second-quarter revenue increased to US$ 13.6 billion on higher delivery volume. Second-quarter operating margin improved to 10.7 percent.
Boeing’s Commercial Airplanes segment booked 481 net orders during the quarter. Backlog remains strong with nearly 4,800 airplanes valued at a record US$ 339 billion. Boeing Defense, Space & Security's second-quarter revenue was US$ 8.2 billion, while operating margin was 9.5 percent. Boeing Military Aircraft second-quarter revenue was US$ 3.9 billion, reflecting lower delivery volume.
Network & Space Systems (N&SS) second-quarter revenue was US$ 2.0 billion, 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 $2.2 billion, due to higher volume in maintenance, modifications & upgrades. Operating margin was 11.8 percent, reflecting strong performance. Backlog at Defense, Space & Security increased to $71 billion, of which 37 percent represents orders with international customers.
Because of the company's unexpected good performance in the second quarter, Boeing updated its 2013 financial guidance to reflect continued strong performance in both businesses, generating an expected 7 percent year over year increase in core earnings per share.
Core earnings per share guidance for 2013 increased to between US$ 6.20 and US$ 6.40, up from between US$ 6.10 and US$ 6.30, and earnings per share guidance increased to between $5.10 and $5.30, up from between $5.00 and $5.20, both reflecting the strong operating performance.
Total company 2013 revenue increased to between US$ 83 and US $86 billion, from between US$ 82 and US$ 85 billion, on higher Defense, Space & Security revenue.
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