01—Abstract
Summary
Summary of the 10-Q filed April 25, 2012. Cited figures are marked; the original filing is the authoritative source.
Boeing Co. reported a significant increase in revenues and net earnings for the first quarter of 2012 compared to the prior year.
Total revenues surged by 30% to $19.38 billiona, primarily driven by a strong performance in the Commercial Airplanes segment, which saw a 54% revenue increase. This growth in commercial sales, coupled with a reduction in research and development expenses for key programs like the 747-8 and 787, significantly boosted operating earnings, leading to a 57% rise in net earnings to $923 million. The company's financial position remains robust, though cash and cash equivalents saw a decrease due to significant investment activities.
Backlog also increased, indicating strong future demand for Boeing's products and services. Despite ongoing legal proceedings and market risks, including potential impacts from the U.S. Export-Import Bank's charter expiration, Boeing appears to be navigating a positive operational period with substantial revenue growth and improved profitability.
02—Key points
Key Highlights
- Total revenues increased by 30% year-over-year to $19.38 billion, driven by strong performance in Commercial Airplanes.
- Net earnings from continuing operations more than doubled to $924 million, resulting in diluted EPS of $1.22, up from $0.78 in the prior year.
- The Commercial Airplanes segment revenue grew by 54% to $10.94 billion, reflecting higher new airplane deliveries and a favorable mix.
- Defense, Space & Security (BDS) revenues increased by 8% to $8.23 billion, supported by growth in Boeing Military Aircraft and Global Services & Support.
- Operating earnings increased by 57% to $1.57 billion, with improved operating margins to 8.1% from 6.7%.
- Contractual backlog grew to $358.6 billion, indicating strong future demand for Boeing's products.
- Cash and cash equivalents decreased by $3.33 billion to $6.72 billion, primarily due to substantial investments.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2012, Boeing Co kept $0.05.
- Revenue$19.38B100.0%
- Cost of revenue−$16.07B82.9%
- Gross profit$3.31B17.1%
- Operating costs−$1.74B9.0%
- Operating income$1.56B8.1%
- Interest, other & tax−$642.0M3.3%
- Net income$923.0M4.8%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2012filed April 25, 2012Financial Statements
Q1 FY2012 against Q1 FY2011
| Line item | Q1 FY2012Q1 FY2011 | Change |
|---|---|---|
| Revenue | $19.38B$14.91B | +30.0% |
| Cost of Revenue | $16.07B$12.05B | +33.4% |
| Gross Profit | $3.31B$2.86B | +15.7% |
| R&D Expenses | $835.00M$1.06B | −21.0% |
| Operating Income | $1.56B$1.00B | +56.5% |
| Net Income | $923.00M$586.00M | +57.5% |
| EPS (Basic) | $1.23$0.79 | +55.7% |
| EPS (Diluted) | $1.22$0.78 | +56.4% |
| Shares Outstanding (Basic) | 752.50M742.90M | +1.3% |
| Shares Outstanding (Diluted) | 757.30M749.00M | +1.1% |
05—Questions
Frequently Asked Questions
What was the primary driver of Boeing's revenue growth in Q1 2012?
The primary driver of Boeing's revenue growth was a significant increase in its Commercial Airplanes segment, which saw revenues rise by 54% due to higher new airplane deliveries and a favorable product mix. This segment's strong performance, coupled with growth in Defense, Space & Security, led to an overall 30% increase in total revenues.
How did Boeing's profitability change compared to the previous year?
Boeing's profitability improved significantly. Net earnings from continuing operations more than doubled to $924 million, and diluted earnings per share increased to $1.22 from $0.78 in the same period last year. This improvement was mainly due to higher revenues and reduced research and development expenses on key programs.
What is the status of Boeing's backlog, and what does it indicate for the future?
Boeing's contractual backlog increased to $358.6 billion. This substantial backlog indicates strong future demand for its aircraft and services, providing a degree of revenue visibility for the company.
Are there any significant risks or uncertainties that investors should be aware of based on this filing?
Yes, the filing highlights several risks. These include potential impacts from the expiration or funding limitations of the U.S. Export-Import Bank's charter, which affects financing for international customers. Additionally, Boeing faces ongoing legal proceedings, including the complex A-12 litigation, and risks associated with new development programs like the 787 and 747-8, which could lead to cost overruns or production challenges. Market risks related to customer financing and economic conditions are also present.
06—Continue