Boeing released its first quarter financial results in a conference call with media and analysts on Wednesday morning US time.
The results show the company achieved a first quarter revenue increase of eight per cent to US$20.5bn (A$22.1bn). The results highlighted an increasing reliance on the company’s commercial products and a greater emphasis on facilities in the Washington state region as its California and Missouri-based C-17 transport and fighter lines draw down and its KC-46A and P-8A programs ramp up.
The figures show 63 per cent of Boeing’s income, or US$12.8bn (A$13.8bn), were from its commercial product lines, a rise from 61 per cent for all of 2013, while defence sales for the first quarter were US$7.6bn (A$8.2bn). This is a stark comparison to 2010/11 where the two sectors were roughly at parity.
Boeing CEO Jim McNerney said he expected Defence sales to remain “near flat” in the short to medium term, but to return to a trend of “slow growth” in the longer term.
But despite some analysts predicting the onset of an order bubble after record sales in recent years, McNerney added that indications were for continuing strong demand from airlines. “We see no softening of demand for our commercial airplanes, given the compelling operating economics and increased fuel efficiency that our airplanes provide,” he said. “Underpinning the strength of this cycle, relative to past ones, is a sustained high level of replacement demand fuelled by compelling aircraft economics and the rapid return on investment, and that comes from replacing older, less efficient aircraft with the dramatically more efficient aircraft we are building today and will introduce through this decade.”
Boeing currently holds a backlog valued at US$440bn (A$473bn) at list prices, and this includes US$19bn (A$20.4bn) of net orders logged in the first quarter alone.
Within its Defense, Space & Security sector, Boeing recorded revenue of US$3.5bn (A$3.8bn) in its Boeing Military Aircraft (BMA) division, while its Network & Space Systems (N&SS) logged US$1.9bn (A$2.04bn), and the Global Services & Support (GS&S) US$2.3bn (A$2.5bn).
The Defense, Space & Security sector is holding a backlog of US$66bn (A$71bn), of which 35 per cent is from overseas orders.