Summary
Boeing's 2016 10-K filing reveals a company navigating a dynamic aerospace and defense landscape. Total revenues saw a slight decrease to $94.6 billion compared to the previous year, primarily driven by a dip in the Commercial Airplanes segment, which still represents the largest portion of sales. The Defense, Space & Security (BDS) segment also experienced a revenue decline, influenced by lower performance in Boeing Military Aircraft (BMA) and Network & Space Systems (N&SS). Despite revenue pressures, the company continued to invest heavily in Research and Development, totaling $4.6 billion, indicating a commitment to future product innovation. Significant charges related to program cost overruns, particularly on the KC-46A Tanker and 747 programs, impacted earnings from operations, leading to a decrease to $5.8 billion. The company also incurred a substantial reclassification of 787 flight test aircraft costs to R&D. These financial pressures, coupled with ongoing competition and government spending uncertainties, highlight key challenges for investors. However, Boeing's substantial backlog of $458 billion provides a degree of revenue visibility. The company also demonstrated a commitment to shareholder returns through significant share repurchases and dividend payments.
Financial Highlights
55 data points| Revenue | $93.50B |
| Cost of Revenue | $79.03B |
| Gross Profit | $14.47B |
| R&D Expenses | $4.63B |
| Operating Income | $6.53B |
| Net Income | $5.03B |
| EPS (Basic) | $7.92 |
| EPS (Diluted) | $7.83 |
| Shares Outstanding (Basic) | 636.50M |
| Shares Outstanding (Diluted) | 642.80M |
Key Highlights
- 1Total revenues for 2016 were $94.6 billion, a decrease of 1.6% from 2015, driven by lower deliveries in Commercial Airplanes and reduced revenues in the Defense, Space & Security (BDS) segment.
- 2Earnings from operations decreased to $5.8 billion in 2016 from $7.4 billion in 2015, impacted by significant charges on programs like the KC-46A Tanker ($1.1 billion) and the 747 program.
- 3Research and Development expenses increased significantly by 30% to $4.6 billion in 2016, largely due to the reclassification of $1.2 billion in 787 flight test aircraft costs to R&D.
- 4The Commercial Airplanes segment, while down slightly in revenue, remains the largest segment, generating $65.1 billion in revenue. However, its earnings from operations fell by 39% to $3.1 billion due to higher R&D and program charges.
- 5The Defense, Space & Security (BDS) segment reported revenues of $29.5 billion, a 2.6% decrease, with earnings from operations declining 8% to $3.0 billion, affected by unfavorable contract adjustments and program charges.
- 6The company's contractual backlog remained substantial at $458.3 billion at year-end 2016, down slightly from $476.6 billion in 2015, indicating strong future revenue potential.
- 7Boeing continued its capital return program, repurchasing $7.0 billion of common stock and paying $2.9 billion in dividends during 2016.