Summary
Boeing's Q2 2016 report (ending June 29, 2016) revealed a significant downturn in net earnings and earnings from operations compared to the prior year. Net earnings dropped to $985 million from $2.45 billion, and earnings from operations fell to $1.37 billion from $3.70 billion. This decline was primarily driven by substantial "reach-forward losses" on the 747 program, amounting to $1.26 billion for the six-month period, and the reclassification of $1.235 billion in costs related to two 787 flight test aircraft from inventory to research and development expense. The Commercial Airplanes segment experienced a dramatic decrease in earnings from operations, turning a profit of $2.82 billion in the first six months of 2015 to a mere $60 million in the same period of 2016. This was heavily impacted by the aforementioned 747 and 787 charges. Defense, Space & Security (BDS) segment, however, showed resilience, with revenues increasing and earnings from operations rising year-over-year. The company maintained a strong total contractual backlog of $462.99 billion, though it saw a slight decrease from the end of 2015.
Financial Highlights
52 data points| Revenue | $24.75B |
| Cost of Revenue | $22.32B |
| Gross Profit | $2.43B |
| R&D Expenses | $2.13B |
| Operating Income | -$419.00M |
| Net Income | -$234.00M |
| EPS (Basic) | $-0.37 |
| EPS (Diluted) | $-0.37 |
| Shares Outstanding (Basic) | 636.30M |
| Shares Outstanding (Diluted) | 635.30M |
Key Highlights
- 1Net earnings for the six months ended June 30, 2016, were $985 million, a significant decrease from $2.45 billion in the prior year's period.
- 2Earnings from operations for the six months ended June 30, 2016, decreased to $1.37 billion from $3.70 billion in the comparable 2015 period.
- 3The Commercial Airplanes segment reported a substantial decline in earnings from operations, down to $60 million from $2.82 billion year-over-year, heavily impacted by program charges.
- 4Significant "reach-forward losses" of $1.26 billion were recognized on the 747 program during the first six months of 2016.
- 5The company reclassified $1.235 billion in costs related to two 787 flight test aircraft from inventory to R&D expense in the second quarter of 2016.
- 6Defense, Space & Security (BDS) segment revenues increased by 6% to $15.13 billion for the six months ended June 30, 2016, and earnings from operations rose to $1.42 billion.
- 7Total contractual backlog remained strong at $462.99 billion as of June 30, 2016, though slightly down from $476.60 billion at the end of 2015.