Jul 28, 2017: The Boeing Company reported strong earnings and operating cash flow in the second quarter of 2017, driven by enhanced operating performance. Second-quarter GAAP earnings per share increased to $2.89 and core earnings per share (non-GAAP)* increased to $2.55. Revenue was $22.7 billion, reflecting planned production rates and timing of commercial and defense aircraft deliveries.
For the full year, GAAP earnings per share guidance increased to between $11.10 and $11.30 from $10.35 and $10.55 and core earnings per share (non-GAAP)* guidance increased to between $9.80 and $10.00 from $9.20 and $9.40, principally driven by better performance across the company and a lower-than-expected tax rate. Operating cash flow guidance increased by $1.5 billion to $12.25 billion on solid execution and a cash tax benefit from accelerating pension funding in the third quarter of 2017. In addition, capital expenditures guidance decreased by $300 million to $2.0 billion.
"Our teams are delivering better performance in every segment of the business, which is reflected in our strong second-quarter results and improved 2017 outlook," said Chairman, President and chief executive officer Dennis Muilenburg. "Our robust cash flow enabled us to return more value to shareholders, invest in future growth and in our people, including a plan to accelerate pension funding that also reduces risk and cyclicality in our business."
"In the second quarter, we added to our large and diverse order backlog with key wins in commercial airplanes, defense, space and services, while achieving important milestones such as delivering the first 737 MAX airplane, flying the second production-ready T-X trainer aircraft, and conducting a successful Ground-based Midcourse Defense intercept test."
"As we look to the second half of the year, our teams are focused on accelerating productivity, quality and safety improvements across the company, while completing key development efforts and delivering better capabilities and economics to our customers."
Operating cash flow in the quarter of $5.0 billion was driven by strong operating performance and positive timing of receipts and expenditures. During the quarter, the company repurchased 13.6 million shares for $2.5 billion, leaving $9.0 billion remaining under the present repurchase authorisation. The company also paid $0.9 billion in dividends in the quarter, reflecting a 30 percent increase in dividends per share compared to the same period of the prior year.
Cash and investments in marketable securities totalled $10.3 billion, up from $9.2 billion at the beginning of the quarter. Debt was $10.8 billion, unchanged from the beginning of the quarter.
Total company backlog at quarter-end was $482 billion, up from $480 billion at the beginning of the quarter, and included net orders for the quarter of $27 billion.
Commercial Airplanes second-quarter revenue was $15.7 billion on planned production rates and timing of deliveries. Second-quarter operating margin was 10.0 percent, reflecting solid execution.
During the quarter, Commercial Airplanes delivered the first 737 MAX 8 aircraft and declared the launch of the 737 MAX 10. Demand continues to be strong with 571 incremental orders and commitments announced at the Paris Air Show, including 56 for widebody aircraft and 361 for the launch of the 737 MAX 10. Also at the Paris Air Show, a number of commercial service contracts were announced that offer additional expansion opportunity for Boeing Global Services.
Commercial Airplanes booked 183 net orders during the quarter. Backlog remains healthy with more than 5,700 airplanes valued at $424 billion.
Defense, Space & Security
Defense, Space & Security second-quarter revenue was $6.9 billion. Second-quarter operating margin increased to 12.9 percent, reflecting increased productivity in all three segments.
Boeing Military Aircraft (BMA) second-quarter revenue was $2.9 billion, reflecting lower planned C-17 deliveries, and operating margin increased to 13.2 percent on superior performance. During the quarter, BMA won a contract for the remanufacture of 38 AH-64E Apache helicopters for the United Kingdom, and the second production-ready T-X aircraft completed first flight.
Network & Space Systems (N&SS) second-quarter revenue was $1.7 billion, reflecting timing of satellite volume. Operating margin increased to 9.1 percent reflecting improved performance. During the quarter, N&SS was awarded a contract from the Missile Defense Agency for Redesigned Kill Vehicle Development.
Global Services & Support (GS&S) second-quarter revenue was $2.3 billion, reflecting timing of contracts. Operating margin increased to 15.4 percent reflecting strong performance. During the quarter, GS&S was awarded a contract from the Defense Logistics Agency to support the F-15 fleet, which will be carried out by Boeing Global Services.
Backlog at Defense, Space & Security was $58 billion, of which 37 percent represents orders from international customers.