Boeing has reported second-quarter net income of
$0.8 billion, or $1.06 per share, on revenue of $15.6 billion.
Boeing's quarterly operating cash flow was $0.3
billion, while for the first half of 2010, operating cash flow was
$19 million. Free cash flow was $9 million in the quarter and $0.5
billion in the first half.
Cash and investments in marketable securities
totaled $10 billion at quarter-end, down $0.4 billion on planned
investments in development programs. Debt was unchanged in the
quarter, and the company did not acquire any of its shares.
Total company backlog at quarter-end was $312
billion, down 1% in the quarter, as backlog for Defense, Space &
Security declined during the period and was somewhat offset by an
increase in Commercial Airplanes backlog.
"We are making progress on key commercial and
military development programs, our production programs and
services businesses are running well, and our enterprise focus on
productivity improvement is funding investment in growth while
maintaining our financial strength," said Jim McNerney, Boeing
chairman, president and chief executive officer. "With our
commercial markets recovering, and the priorities of our
government customers gaining clarity, we remain well positioned
for growth in 2011 and beyond."
Commercial Airplanes
Boeing Commercial Airplanes second-quarter
revenue was $7.4 billion, on 9% fewer airplane deliveries driven
by anticipated seat supplier challenges and lower planned
wide-body deliveries. Operating margin was 9.2% as performance
partially offset the impact of lower deliveries.
Commercial Airplanes booked 88 gross orders
during the quarter while 20 orders were removed from its order
book. This contrasts with the year-ago period when net orders were
five airplanes. Contractual backlog remains strong with 3,304
airplanes valued at $252 billion, more than seven times the unit's
projected 2010 revenue.
The
787 program continued flight tests during the quarter, as a
fifth airplane joined the four airplanes already in the flight
test program. The Dreamliner completed key flight test milestones,
including extreme weather, icing and cruise performance testing.
On 1 July, the program completed another key milestone with the
completion of 787-9 firm configuration.
First delivery continues to be planned for the
end of this year, although Boeing admitted that there is added
pressure to the schedule and risk that initial delivery may move a
few weeks as the company completes flight test and certification
requirements. Total firm orders for the 787 program at quarter-end
were 863 airplanes from 56 customers.
The
747-8 program continued flight test during the quarter
achieving expanded Type Inspection Authorization on 11 June. On 22
July, the 747-8 added a fourth flight test airplane to its flight
test fleet. The company continues to work toward first delivery in
the fourth quarter of 2010, although there is increasing pressure
on that schedule and risk that it may move into early 2011.
Outlook
Boeing's 2010 revenue guidance is reaffirmed at
$64 billion to $66 billion. Earnings guidance for 2010 remains at
$3.50 to $3.80 per share and continues to include some provision
for risks. Operating cash flow guidance is reaffirmed at
approximately zero in 2010, as the company continues to build
inventory on key commercial development programs.
The company continues to expect that 2011
revenue will be higher than 2010, primarily driven by projected
787 and 747-8 deliveries. Combining higher projected deliveries
with spending plans for R&D investments and other factors,
operating cash flow in 2011 is still expected to be greater than
$5 billion.
Commercial Airplanes' 2010 delivery guidance
remains unchanged at between 460 and 465 airplanes and is sold
out. It includes the first few 787 and 747-8 deliveries. The
unit's 2010 revenue guidance is reaffirmed at $31 billion to $32
billion and operating margin guidance is increased to between 7.5%
and 8.5%, up from 6.5% to 7.5% on strong core operating
performance.
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