01—Abstract
Summary
Summary of the 10-Q filed October 24, 2012. Cited figures are marked; the original filing is the authoritative source.
Boeing's third-quarter 2012 report shows a significant increase in revenue driven by strong performance in the Commercial Airplanes segment, up 37%a year-over-year due to higher new airplane deliveries.
This growth contributed to a rise in overall earnings from operations. However, the Defense, Space & Security (BDS) segment experienced mixed results, with overall revenue slightly up year-over-year for the nine-month period but down for the quarter, impacted by declines in the Network & Space Systems division. The company's financial position remains solid, with a substantial contractual backlog of $357.7 billionb, indicating a strong future revenue pipeline.
Boeing also reported a healthy cash position, though cash used in investing activities increased significantly due to higher investments in commercial airplane program inventory, particularly for the 787 program. The company's liquidity appears adequate, with significant unused borrowing capacity on its credit facilities.
02—Key points
Key Highlights
- Total revenues increased by 21% for the nine months and 13% for the three months ended September 30, 2012, compared to the prior year periods.
- The Commercial Airplanes segment saw a substantial revenue increase of 37% for the nine months and 28% for the three months, driven by higher new airplane deliveries.
- Total contractual backlog reached $357.7 billion, indicating strong future order fulfillment.
- Earnings from operations for the nine months increased by $435 million, primarily due to higher Commercial Airplanes earnings and favorable litigation resolution.
- The Defense, Space & Security segment's revenues for the nine months increased slightly, but decreased for the three-month period, with mixed performance across its sub-segments.
- Cash provided by operating activities significantly increased to $3,341 million for the nine months ended September 30, 2012, up from $1,092 million in the prior year.
- Boeing Capital's revenue and earnings decreased year-over-year, largely due to lower lease income and revised contractual terms with certain lessees.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2012, Boeing Co kept $0.05.
- Revenue$20.01B100.0%
- Cost of revenue−$16.80B84.0%
- Gross profit$3.21B16.0%
- Operating costs−$1.65B8.2%
- Operating income$1.56B7.8%
- Interest, other & tax−$527.0M2.6%
- Net income$1.03B5.2%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2012filed October 24, 2012Financial Statements
Q3 FY2012 against Q3 FY2011
| Line item | Q3 FY2012Q3 FY2011 | Change |
|---|---|---|
| Revenue | $20.01B$17.73B | +12.9% |
| Cost of Revenue | $16.80B$14.36B | +17.0% |
| Gross Profit | $3.21B$3.37B | −4.8% |
| R&D Expenses | $853.00M$901.00M | −5.3% |
| Operating Income | $1.56B$1.71B | −9.0% |
| Net Income | $1.03B$1.10B | −6.0% |
| EPS (Basic) | $1.36$1.47 | −7.5% |
| EPS (Diluted) | $1.35$1.46 | −7.5% |
| Shares Outstanding (Basic) | 759.50M748.00M | +1.5% |
| Shares Outstanding (Diluted) | 762.80M753.90M | +1.2% |
05—Questions
Frequently Asked Questions
What is the primary driver of Boeing's revenue growth in this quarter?
The primary driver of Boeing's revenue growth is the strong performance of its Commercial Airplanes segment, which experienced a significant increase in revenue due to a higher number of new airplane deliveries.
How is the Defense, Space & Security segment performing?
The Defense, Space & Security segment showed mixed results. While overall revenues for the nine-month period saw a slight increase, revenues for the third quarter decreased. Performance varied across its sub-segments, with Boeing Military Aircraft and Global Services & Support showing some increases, while Network & Space Systems experienced declines.
What is the company's outlook regarding its backlog?
Boeing maintains a substantial contractual backlog of $357.7 billion, which represents unfilled orders. This indicates a strong pipeline of future business for the company.
Are there any significant financial risks or contingencies mentioned in the report?
Yes, the report details several potential risks and contingencies. These include ongoing legal proceedings such as the A-12 litigation, environmental remediation liabilities, potential impacts from U.S. government defense budget cuts (sequestration), and risks associated with new airplane development programs like the 787 and 747-8 due to their complexity and production challenges.
06—Continue