Boeing Reports Fourth-Quarter Results and Provides 2017 Guidance

25/01/2017 05:30

Source: PR News

CHICAGO, Jan. 25, 2017 /PRNewswire/ --

Fourth-Quarter 2016

  • Operating cash flow of $2.8 billion driven by solid operating performance
  • GAAP EPS of $2.59 and core EPS (non-GAAP)* of $2.47 on solid execution

Full-Year 2016

  • Revenue of $94.6 billion reflecting 926 commercial and defense aircraft deliveries and services growth
  • Record operating cash flow of $10.5 billion; repurchased 55.1 million shares for $7.0 billion
  • Backlog remains robust at $473 billion with more than 5,700 commercial airplane orders
  • Cash and marketable securities of $10.0 billion provide strong liquidity

Outlook for 2017

  • Operating cash flow expected to increase to approximately $10.75 billion
  • 2017 GAAP EPS of between $10.25 and $10.45; core EPS (non-GAAP)* of between $9.10 and $9.30



















Table 1. Summary Financial Results


Fourth Quarter



Full Year



(Dollars in Millions, except per share data)


2016

2015

Change

2016

2015

Change









Revenues



$23,286



$23,573


(1)%



$94,571



$96,114


(2)%










GAAP








Earnings From Operations



$2,183



$1,161


88%



$5,834



$7,443


(22)%


Operating Margin


9.4%


4.9%


4.5 Pts


6.2%


7.7%


(1.5) Pts


Net Earnings



$1,631



$1,026


59%



$4,895



$5,176


(5)%


Earnings Per Share



$2.59



$1.51


72%



$7.61



$7.44


2%


Operating Cash Flow



$2,832



$3,119


(9)%



$10,499



$9,363


12%


Non-GAAP*








Core Operating Earnings



$2,064



$1,259


64%



$5,464



$7,741


(29)%


Core Operating Margin


8.9%


5.3%


3.6 Pts


5.8%


8.1%


(2.3) Pts


Core Earnings Per Share



$2.47



$1.60


54%



$7.24



$7.72


(6)%


* Non-GAAP measures. Complete definitions of Boeing's non-GAAP measures are on page 7, "Non-GAAP Measures Disclosures."     

The Boeing Company [NYSE: BA] reported fourth-quarter revenue of $23.3 billion with GAAP earnings per share of $2.59 and core earnings per share (non-GAAP)* of $2.47 reflecting overall solid execution on production programs and services (Table 1).

Revenue was $94.6 billion for the full year reflecting strong commercial deliveries and services growth across the company. GAAP earnings per share totaled $7.61 and core earnings per share (non-GAAP)* totaled $7.24.

Guidance for 2017 is set at between $10.25 and $10.45 for GAAP earnings per share and between $9.10 and $9.30 for core earnings per share (non-GAAP)*. Revenue guidance is between $90.5 and $92.5 billion, including increased commercial deliveries of between 760 and 765. Operating cash flow is expected to increase by approximately $250 million to $10.75 billion and capital expenditures are expected to decline by approximately $300 million to $2.3 billion.

"With solid fourth quarter operating performance and a sharp strategic focus, we extended our aerospace market leadership in our centennial year and positioned Boeing for continued growth and success in our second century," said Chairman, President and Chief Executive Officer Dennis Muilenburg.

"We led the industry in commercial airplane deliveries for the fifth consecutive year, achieved healthy sales in our defense, space and services segments, and produced record operating cash flow, which fueled investment in innovation and our people and generated significant returns to shareholders."

"Looking forward, our team is intent on accelerating productivity and program execution to deliver increasing cash and profitability from our large and diverse order backlog of nearly $500 billion, standing up our new integrated services business, and capturing an even greater share of the the growing global aerospace market to deliver superior value to our customers, shareholders and employees."
















Table 2. Cash Flow


Fourth Quarter

Full Year

(Millions)


2016

2015

2016

2015

Operating Cash Flow



$2,832



$3,119



$10,499



$9,363


Less Additions to Property, Plant & Equipment



($599)



($623)



($2,613)



($2,450)


Free Cash Flow*



$2,233



$2,496



$7,886



$6,913


* Non-GAAP measures. Complete definitions of Boeing's non-GAAP measures are on page 7, "Non-GAAP Measures Disclosures."     

Operating cash flow in the quarter of $2.8 billion was driven by solid operating performance, disciplined cash management, and a slight impact from timing of receipts and expenditures (Table 2). During the quarter, the company repurchased 3.7 million shares for $500 million and paid $672 million in dividends. For the full year, the company repurchased 55.1 million shares for $7.0 billion and paid $2.8 billion in dividends. Based on strong cash generation and confidence in the company's outlook, the board of directors in December increased the quarterly dividend per share by 30 percent and renewed the share repurchase program to $14 billion. Share repurchases under the new authorization are expected to be made over the next 24 to 30 months.










Table 3. Cash, Marketable Securities and Debt Balances


Quarter-End

(Billions)


Q4 16

Q3 16

Cash



$8.8



$9.0


Marketable Securities1



$1.2



$0.7


Total



$10.0



$9.7


Debt Balances:




The Boeing Company, net of intercompany loans to BCC



$7.1



$8.1


Boeing Capital, including intercompany loans



$2.9



$2.4


Total Consolidated Debt



$10.0



$10.5


1 Marketable securities consists primarily of time deposits due within one year classified as "short-term investments."

Cash and investments in marketable securities totaled $10.0 billion, up from $9.7 billion at the beginning of the quarter (Table 3). Debt was $10.0 billion, down from the beginning of the quarter, due to repayment of debt.

Total company backlog at quarter-end was $473 billion, up from $462 billion at the beginning of the quarter, and included net orders for the quarter of $32 billion.

Segment Results

Commercial Airplanes




















Table 4. Commercial Airplanes


Fourth Quarter



Full Year



(Dollars in Millions)


2016

2015

Change

2016

2015

Change










Commercial Airplanes Deliveries


185


182


2%


748


762


(2)%











Revenues



$16,241



$16,098


1%



$65,069



$66,048


(1)%


Earnings from Operations



$1,473



$566


160%



$3,130



$5,157


(39)%


Operating Margin


9.1%


3.5%


5.6 Pts


4.8%


7.8%


(3.0) Pts


Commercial Airplanes fourth-quarter revenue increased to $16.2 billion on higher planned delivery volume and mix (Table 4). Fourth-quarter operating margin was 9.1 percent, reflecting delivery mix, lower R&D and improved performance, partially offset by a $243 million pre-tax charge on the KC-46 Tanker program primarily related to additional effort to incorporate previously identified changes into initial production aircraft.

During the quarter, Boeing delivered the 500th 787 Dreamliner and began final assembly of the first 787-10 aircraft. The 737 program has captured more than 3,600 orders for the 737 MAX, including recent 737 MAX 8 orders from GE Capital Aviation Services for 75 airplanes and SpiceJet for 100 airplanes.

Commercial Airplanes booked 288 net orders during the quarter. Backlog remains strong with more than 5,700 airplanes valued at $416 billion.

Defense, Space & Security




















Table 5. Defense, Space & Security


Fourth Quarter



Full Year



(Dollars in Millions)


2016

2015

Change

2016

2015

Change

Revenues1








Boeing Military Aircraft



$2,617



$3,187


(18)%



$12,515



$13,424


(7)%


Network & Space Systems



$1,800



$1,954


(8)%



$7,046



$7,751


(9)%


Global Services & Support



$2,443



$2,644


(8)%



$9,937



$9,213


8%


Total BDS Revenues



$6,860



$7,785


(12)%



$29,498



$30,388


(3)%


Earnings from Operations1








Boeing Military Aircraft



$288



$437


(34)%



$1,231



$1,311


(6)%


Network & Space Systems



$157



$163


(4)%



$493



$726


(32)%


Global Services & Support



$364



$363




$1,284



$1,237


4%


Total BDS Earnings from Operations



$809



$963


(16)%



$3,008



$3,274


(8)%


Operating Margin


11.8%


12.4%


(0.6) Pts


10.2%


10.8%


(0.6) Pts


1 During the first quarter of 2016, certain programs were realigned between Boeing Military Aircraft and Global Services & Support.

Defense, Space & Security's fourth-quarter revenue was $6.9 billion (Table 5). Fourth-quarter operating margin was 11.8 percent, reflecting a $69 million pre-tax charge on the KC-46 Tanker program at BMA, partially offset by solid execution.

Boeing Military Aircraft (BMA) fourth-quarter revenue was $2.6 billion, reflecting lower planned deliveries and mix, with operating margin of 11.0 percent. During the quarter, pending international sales of F-15 and F/A-18 fighter jets and Chinook and Apache helicopters were approved by the U.S. State Department, reaching the final stage of the U.S. foreign military sales process before contract negotiations.

Network & Space Systems (N&SS) fourth-quarter revenue was $1.8 billion, largely reflecting lower satellite volume, with an operating margin of 8.7 percent. During the quarter, the eighth Wideband Global SATCOM satellite was launched with an upgraded digital payload.

Global Services & Support (GS&S) fourth-quarter revenue was $2.4 billion, reflecting lower volume in Aircraft Modernization & Sustainment. Operating margin was 14.9 percent largely reflecting contract mix. During the quarter, GS&S completed digital flight deck upgrades to the first of 14 NATO Airborne Warnings and Control Systems (AWACS) aircraft.

Backlog at Defense, Space & Security was $57 billion, of which 37 percent represents orders from international customers.

Additional Financial Information
















Table 6. Additional Financial Information


Fourth Quarter

Full Year

(Dollars in Millions)


2016

2015

2016

2015

Revenues






Boeing Capital



$87



$98



$298



$413


Unallocated items, eliminations and other



$98



($408)



($294)



($735)


Earnings from Operations






Boeing Capital



$23



$9


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