-- Third-quarter revenue was $16.7 billion, 9 percent higher than last
year's strike-affected quarter
-- Loss of $2.23 per share reflects $3.59 per share of expenses related to
previously announced 787 cost reclassification and 747 charge, partially
offset by solid performance in other commercial programs and the defense
business
-- Operating cash flow increased to $1.2 billion
-- Backlog at $320 billion - nearly five times current annual revenues
-- 2009 guidance updated for 787 cost reclassification and 747 charge
Table 1. Summary Financial Results
Third Quarter Nine Months
------------- -----------
(Dollars in
Millions, except
per share data) 2009 2008 Change 2009 2008 Change
----------------- ---- ---- ---- ----
Revenues $16,688 $15,293 9% $50,344 $48,245 4%
Earnings/(Loss) From
Operations ($2,151) $1,147 NA $403 $4,193 NA
Operating Margin (12.9%) 7.5% NA 0.8% 8.7% NA
Net Income/(Loss) ($1,564) $695 NA $44 $2,758 NA
Earnings/(Loss)
per Share ($2.23) $0.96 NA $0.06 $3.76 NA
Operating Cash Flow $1,197 ($442) NA $2,391 $1,240 93%
The Boeing Company (NYSE: BA) reported a third-quarter net loss of $1.6 billion, or $2.23 per share, as revenues rose 9 percent to $16.7 billion. Current period results reflect the previously announced reclassification to research and development (R&D) of costs incurred through July for the first three 787 flight-test airplanes ($2.46 per share), spending on those planes for August and September ($0.14 per share), and the 747 charge ($0.99 per share), partially offset by solid performance in other commercial airplane programs and the company's defense business (Table 1). Last year's strike and supplier production problems reduced year-ago revenue by an estimated $2.1 billion and earnings by an estimated $0.60 per share.
Revenues for the first nine months of 2009 rose 4 percent to $50.3 billion due to higher commercial deliveries and growth in the defense segment. Earnings for the first nine months declined to $0.06 per share, including the third-quarter impacts described above and a first-quarter $0.38 per share impact from reductions to future twin-aisle production rates and lower delivery price escalation forecasts in Commercial Airplanes.
Earnings guidance for 2009 has been adjusted to between $1.35 and $1.55 per share, from $4.70 to $5.00, to reflect the 787 and 747 impacts.
"The 787 cost reclassification and the 747 charge for increased costs and difficult market conditions clearly overshadowed what continues to be otherwise solid performance across our commercial production programs and defense business," said Boeing Chairman, President and Chief Executive Officer Jim McNerney. "We look forward to getting the 787 and 747-8 in the air soon and moving forward with flight test and certification for these two important programs."
Boeing's quarterly operating cash flow was $1.2 billion, which includes higher cash receipts than the year-ago period partially offset by continued investment in development programs (Table 2). For the first nine months of 2009, operating cash flow was $2.4 billion. Free cash flow* was $1.0 billion in the quarter and $1.4 billion year-to-date.
Table 2. Cash Flow
Third Quarter Nine Months
------------- -----------
(Millions) 2009 2008 2009 2008
---------- ---- ---- ---- ----
Operating Cash Flow(1) $1,197 ($442) $2,391 $1,240
Less Additions to Property,
Plant & Equipment ($229) ($422) ($965) ($1,229)
----- ----- ----- -------
Free Cash Flow* $968 ($864) $1,426 $11
---------------- ---- ----- ------ ---
(1) Operating cash flow for third quarter of 2009 includes a $60 million
contribution to pension plans. Operating cash flow for the first nine
months includes a $60 million contribution to pension plans in 2009
and $531 million in 2008.
* 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 $6.6 billion at September 30, up 31 percent from the end of the second quarter. The cash position was improved by the issuance of $1.95 billion in debt partially offset by investing cash flows of $1.0 billion for the purchase of 787 facilities in South Carolina and payment of Sea Launch guarantees (Table 3). The company did not acquire any of its shares in the quarter.
Table 3. Cash, Marketable Securities and Debt Balances
Quarter-
End
--------
(Billions) 3Q09 2Q09
---------- ---- ----
Cash $6.1 $4.6
Marketable Securities(1) $0.5 $0.4
---- ----
Total $6.6 $5.0
Debt Balances:
The Boeing Company $7.6 $5.7
Boeing Capital Corporation $3.4 $3.4
---- ----
Total Consolidated Debt $11.0 $9.1
-------------------------- ----- ----
(1) Marketable securities consists primarily of investment-grade
instruments classified as "short-term investments" and
"investments."
