The Boeing Company has recorded a 21 per cent fall in net profit for the quarter ending June 30 as revenue dropped due to lower aircraft deliveries and lower volumes from its military operations.
The company recorded consolidated net income of US$787m (A$880m) for the quarter as revenue fell by nine per cent to US$15.6bn (A$17.4bn). Earnings from Boeing Commercial Airplanes declined by 16 per cent to US$683m (A$764m), while earnings from Defense, Space & Security were down by 19 per cent to US$711m (A$795m).
Despite the falls in revenue and profits, CEO Jim McNerney said that the results represented a solid operating performance for the quarter. “We are making progress on key commercial and military development programs, our production programs and services businesses are running well, and our enterprise focus on productivity improvement is funding investment in growth while maintaining our financial strength,” he said.
For the quarter, Boeing Commercial Airplanes delivered 114 aircraft, representing a nine per cent decrease over the same period last year, while it also took net orders for 68 aircraft. This saw the company end the quarter with a backlog of 3304 aircraft, valued at US$252bn (A$282bn).
The company commented that the 787 and 747-8F both passed critical milestones in their flight test programs, while it also firmed the design for the 787-9. However, it noted that both programs had “increasing pressure” on their delivery schedules, which could force some delivery delays, pushing delivery of the first of each to early 2011 instead of the final quarter of this year.
The company’s Defence, Space & Security unit fared well, although revenue was down in all businesses except Boeing Military Aircraft as deliveries of Chinook helicopters increased, while it also saw a charge against it related to the Turkish Peace Eagle AEW&C program (based on the RAAF Wedgetail). Backlog at Defense, Space & Security is valued at US$60.6bn (A$68bn), a decline of US$3.6bn (A$4bn) as run-off of multi-year contracts exceeded additions to backlog in the quarter.
McNerney said in his outlook that the company was well placed over the coming year to benefit from new opportunities as the world economy rebounds. “With our commercial markets recovering, and the priorities of our government customers gaining clarity, we remain well positioned for growth in 2011 and beyond.”
Boeing’s 2010 revenue guidance is reaffirmed at US$64-$66bn (A$71-74bn), with its earnings guidance for remaining at US$3.50-$3.80 (A$3.91-$4.25) per share. It also expects to deliver 460-465 aircraft for the full year, including the first few 787s and 747-8Fs, with all aircraft sold out.