-- Revenue rose 3 percent to $16.5 billion on higher commercial airplane deliveries and higher volume in defense
-- Operating cash flow was $0.2 billion
-- Backlog at $339 billion - nearly five times current annual revenues
-- 2009 earnings outlook reduced to reflect changes in commercial market; outlook for Integrated Defense Systems is reaffirmed on solid execution
CHICAGO, April 22 /PRNewswire-FirstCall/ -- The Boeing Company's (NYSE: BA) first-quarter 2009 earnings per share decreased 47 percent to $0.86 driven by the previously announced $0.38 per share impact from pending twin-aisle production rate changes and lower delivery price escalation forecasts in commercial airplanes (Table 1). The majority of this earnings impact was recorded as an increase in the reach-forward loss position of the 747 program.
Table 1. Summary Financial Results
First Quarter
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(Millions, except per share data) 2009 2008 Change
--------------------------------- ---- ---- ------
Revenues $16,502 $15,990 3%
Earnings From Operations $1,025 $1,799 (43%)
Operating Margin 6.2% 11.3% (5.1)Pts
Reported Net Income $610 $1,211 (50%)
Reported Earnings per Share $0.86 $1.62 (47%)
Operating Cash Flow $193 $1,933 N.A.
Excluding the effects of a weakened commercial airplane market, solid execution on programs across Integrated Defense Systems and Commercial Airplanes underpinned the quarter's results. Results were also impacted by a less favorable delivery mix in defense and higher expense for research and development.
"The expanded global economic downturn is presenting unprecedented challenges in our commercial airplane markets," said Boeing Chairman, President, and Chief Executive Officer Jim McNerney. "We believe we are better positioned than most companies to withstand the ongoing pressures of this economy, and we are not hesitating to take necessary actions to preserve our financial strength and maintain our ability to invest and grow for the long term. Performance across the overwhelming majority of our programs remains solid, and we are making progress toward our milestones on the 787 and other important programs."
Boeing's quarterly revenue rose 3 percent to $16.5 billion while its operating cash flow was $0.2 billion reflecting continued investment in development programs and lower advances from commercial airplane orders. Free cash flow* was ($0.2) billion (Table 2).
Boeing lowered its 2009 earnings per share guidance to between $4.70 and $5.00 primarily due to the lower price escalation forecasts.
Total company backlog at quarter-end was $339 billion, down 4 percent in the quarter, driven by run-off of backlog through revenues, the lower price escalation forecast, and previously announced 787 cancellations, partially offset by new orders in IDS for C-17 and integrated logistics.
Table 2. Cash Flow
First Quarter
-------------
(Millions) 2009 2008
---------- ---- ----
Operating Cash Flow (1) $193 $1,933
Less Additions to Property, Plant & Equipment ($442) ($409)
----- -----
Free Cash Flow* ($249) $1,524
---------------- ----- ------
(1) Operating cash flow for the first quarter of 2008 includes a
$506 million contribution to pension plans.
* Non-GAAP measure. A complete definition and reconciliation
of Boeing's use of non-GAAP measures, identified by an
asterisk (*), is found on page 8, "Non-GAAP Measure
Disclosure."
Cash and investments in marketable securities totaled $4.7 billion at quarter-end, up during the first quarter as a result of new debt issuance (Table 3). The company spent $50 million to acquire 1.2 million of its shares in the quarter.
Table 3. Cash, Marketable Securities and Debt Balances
Quarter-
End
--------
(Billions) 1Q09 4Q08
---------- ---- ----
Cash $4.2 $3.3
Marketable Securities(1) $0.5 $0.3
---- ----
Total $4.7 $3.6
Debt Balances:
The Boeing Company $5.7 $3.9
Boeing Capital Corporation $3.6 $3.6
---- ----
Total Consolidated Debt $9.3 $7.5
-------------------------- ---- ----
(1) Marketable securities consists primarily of investment-grade
instruments classified as "short-term investments" and
"investments."
