KUALA LUMPUR, April 23 – The Boeing Company today reported its first-quarter revenue increased 8.0 per cent to US$20.5 billion on higher commercial volume. Its core earnings per share (non-GAAP) increased 14 per cent to US$1.76. First-quarter 2014 core operating earnings (non-GAAP) increased 12 per cent to US$2.1 billion and core operating margin (non-GAAP) increased to 10.2 per cent reflecting continued strong operating performance. The company also reaffirmed its 2014 revenue, operating cash flow and deliveries guidance. “Disciplined execution across our production and development programs produced strong first quarter results,” Boeing Chairman and Chief Executive Officer Jim McNerney said in a statement.
“We measurably increased revenue, core operating earnings and cash flow, and expanded core operating margins. This financial and operational strength enabled the return of more than US$3 billion to shareholders in the quarter through share repurchase and an increased dividend, even as we continued to invest in our future,” he added. “Our outlook for the full year remains positive on the strength of demand for our fuel-efficient new commercial airplanes, solid position in global defense, space and security markets and enterprise focus on meeting customer commitments, improving productivity and profitably delivering the growth in our sizable backlog,” McNerney said. Operating cash flow in the quarter was US$1.1 billion, reflecting commercial airplane production rates, strong core operating performance and timing of receipts and expenditures. During the quarter, the company repurchased 19.4 million shares for US$2.5 billion, leaving US$8.3 billion remaining under the current repurchase authorisation expected to be completed over the next two to three years.
Total company backlog at quarter-end was a US$440 billion, down slightly from the beginning of the year, and included net orders for the quarter of US$19 billion. Boeing Commercial Airplanes first-quarter revenue increased to US$12.7 billion on higher 787 and 737 deliveries. First-quarter operating margin improved to 11.8 per cent reflecting the delivery volume and mix and lower period costs partially offset by higher research and development. During the quarter, the 787 programme reached a 10 per month production rate and completed preliminary design review on the 787-10. The company selected the Everett, Washington site as the location for a new composite wing center for the 777X. In April, the 737 programme reached a production rate of 42 per month. Commercial Airplanes booked 235 net orders during the quarter. Backlog remains strong with over 5,100 airplanes valued at US$374 billion. Boeing Defense, Space & Security’s first-quarter revenue was US$7.6 billion with an operating margin of 10.2 per cent. Boeing Military Aircraft (BMA) first-quarter revenue declined to US$3.5 billion, as the first quarter of 2013 included revenue associated with F-15 development milestones and due to fewer P-8 deliveries in the first quarter of 2014
Operating margin was 9.6 per cent, reflecting strong performance offset by a previously announced C-17 inventory-related charge. During the quarter, BMA was awarded a contract for 16 P-8A Poseidon aircraft from the U.S. Navy and a contract for 82 Apache Block III helicopters from the U.S. Army. Meanwhile, Network & Space Systems (N&SS) first-quarter revenue was US$1.9 billion, reflecting lower satellites volume, and operating margin increased to 9.0 per cent on strong performance. During the quarter, N&SS completed on-orbit testing of the first Inmarsat-5 satellite. Global Services & Support (GS&S) first-quarter revenue increased to US$2.3 billion, reflecting higher volume in maintenance, modifications and upgrades. Operating margin increased to 12.1 per cent on improved performance in integrated logistics. During the quarter, GS&S was awarded a contract to provide maintenance training devices for the U.S. Navy’s P-8A Poseidon aircraft. Backlog at Defense, Space & Security was US$66 billion, of which 35 per cent represents orders with international customers.