Boeing Reports Solid Third Quarter of US$25.1-Billion; Reaffirms Cash and Raises Revenue and EPS Guidance

Chicago,Ill. Oct. 24, 2018 — The Boeing Company [NYSE: BA] reported third-quarter revenue of US$ 25.1 billion driven by higher defense volume and services growth. GAAP earnings per share increased to US$ 4.07 and core earnings per share increased to US$ 3.58 primarily driven by strong operating performance at Commercial Airplanes and a tax benefit related to a tax settlement. Results also reflect charges related to planned investments in the newly awarded T-X Trainer and MQ-25 programs ($0.93 per share). Boeing delivered strong operating cash flow of US$ 4.6 billion, repurchased US$ 2.5 billion of shares, and paid US$1 billion of dividends.

The company's revenue guidance increased US$1 billion to between US$ 98 and US$100 billion, driven by defense volume and services growth, inclusive of the KLX acquisition. Operating cash flow guidance is reaffirmed at US$ 15 to US$ 15.5 billion. Full year GAAP earnings per share guidance is increased to between US$16.90 and US$17.10 from between US$16.40 and US$16.60 and core earnings per share guidance is increased to between US$14.90 and US$15.10 from between US$14.30 and US$14.50 driven by a lower-than-expected tax rate and improved performance at Commercial Airplanes.

"Our teams continued to perform at a high level during the quarter, driving solid operating performance and robust cash generation, and continuing to deliver on our One Boeing advantage by bringing the best of Boeing to our customers," said Boeing chairman, president and chief executive officer Dennis Muilenburg.

Total company backlog at quarter-end was US$ 491 billion, up from US$ 488 billion at the beginning of the quarter, and included net orders for the quarter of US$ 28 billion.

Defense, Space & Security third-quarter revenue increased to US$ 5.7 billion driven by increased volume across government satellites, KC-46 Tanker, F/A-18 and weapons (Table 5). Third-quarter operating margin was (4.3) percent, primarily reflecting US$ 691 million of charges related to planned investments in the T-X and MQ-25 programs and $64 million related to cost growth on the KC-46 Tanker program.

During the quarter, Defense, Space & Security won key franchise program awards, including the T-X Trainer and MH-139 helicopter for the U.S. Air Force, the MQ-25 unmanned aircraft for the U.S. Navy, and the fourth KC-46 Tanker production lot. Significant milestones during the quarter included first flights of the Apache and Chinook for the Indian Air Force and receipt of Supplemental Type Certification for the KC-46 Tanker program, signifying completion of FAA certification.

Boeing said it also completed the acquisition of Millennium Space Systems, which will provide customers with advanced small-satellite technologies and flexible solutions.

Backlog at Defense, Space & Security was US$ 58 billion, of which 31 percent represents orders from customers outside the U.S. Defense, Space & Security revenue guidance increased to between US$ 22.5 and US$ 23 billion from between US$ 22 and US$ 23 billion driven by higher volume and margin guidance is adjusted to greater than 6.5% from between 10% and 10.5% primarily to account for the investments in the business.