Summary
Boeing's first quarter 2016 results showed a decrease in net earnings to $1.22 billion ($1.83 diluted EPS) from $1.34 billion ($1.87 diluted EPS) in the prior year period. Total revenues increased slightly to $22.63 billion from $22.15 billion, driven by a significant boost in the Defense, Space & Security (BDS) segment, which offset a decline in Commercial Airplanes revenue. Despite the revenue growth, a substantial increase in research and development expenses, particularly for the 777X program, and a significant reach-forward loss recorded on the KC-46A Tanker program impacted profitability. The company also continued its aggressive share repurchase program, demonstrating a commitment to returning capital to shareholders, though this contributed to a notable decrease in cash and cash equivalents and an increase in net cash used by financing activities. Investors should monitor the impact of ongoing program-specific charges and R&D investments on future earnings.
Financial Highlights
52 data points| Revenue | $22.63B |
| Cost of Revenue | $19.10B |
| Gross Profit | $3.54B |
| R&D Expenses | $917.00M |
| Operating Income | $1.79B |
| Net Income | $1.22B |
| EPS (Basic) | $1.85 |
| EPS (Diluted) | $1.83 |
| Shares Outstanding (Basic) | 659.60M |
| Shares Outstanding (Diluted) | 664.80M |
Key Highlights
- 1Total revenues increased by 2% to $22.6 billion, primarily driven by a 19% rise in Defense, Space & Security (BDS) segment revenue, which offset a 6% decrease in Commercial Airplanes revenue.
- 2Net earnings decreased by 8.5% to $1.22 billion, resulting in diluted EPS of $1.83, down from $1.87 in the prior year period.
- 3Research and development expenses rose by $148 million, largely due to increased spending on the 777X program.
- 4The company recorded significant charges, including a $243 million reach-forward loss on the KC-46A Tanker program and an additional $70 million loss on the 747 program.
- 5Boeing continued its aggressive share repurchase activity, buying back $3.5 billion in stock during the quarter.
- 6Cash and cash equivalents decreased significantly by $3.4 billion, largely due to share repurchases and a reduction in proceeds from stock options exercised.
- 7The Commercial Airplanes segment saw a decline in earnings from operations by $584 million, impacted by delivery mix, R&D costs, and program charges.