10-QPeriod: Q3 FY2018

BOEING CO Quarterly Report for Q3 Ended Sep 30, 2018

Filed October 24, 2018For Securities:BABA-PA

Summary

Boeing reported strong top-line growth in the third quarter and year-to-date 2018, with total revenues increasing to $25.1 billion for the quarter and $72.8 billion for the nine months ended September 30, 2018. This growth was primarily driven by solid performance in the Defense, Space & Security (BDS) and Global Services (BGS) segments, with Commercial Airplanes (BCA) revenue also showing an increase year-over-year for the nine-month period due to delivery mix. Net earnings also saw a significant increase, reaching $2.36 billion for the quarter and $7.04 billion for the nine months, up from $1.81 billion and $5.14 billion respectively in the prior year periods. This strong profitability is reflected in diluted earnings per share, which rose to $4.07 for the quarter and $11.95 year-to-date. The company's backlog remains robust at $491 billion, indicating strong future revenue potential.

Financial Highlights

54 data points
Beta

Revenue

$25.15B

16.3% Gross Margin

Net Income

$2.36B

9.4% Net Margin

EPS (Diluted)

$4.07

Total Assets

$114.66B

Cash & Equivalents

$8.03B

Free Cash Flow

$4.10B

Financial Statements
Beta
Revenue$25.15B
Cost of Revenue$21.04B
Gross Profit$4.11B
R&D Expenses$826.00M
Operating Income$2.23B
Net Income$2.36B
EPS (Basic)$4.11
EPS (Diluted)$4.07
Shares Outstanding (Basic)574.80M
Shares Outstanding (Diluted)580.20M

Key Highlights

  • 1Total revenues for the nine months ended September 30, 2018 increased to $72.8 billion, up from $69.2 billion in the same period of 2017, driven by BDS and BGS segment growth.
  • 2Net earnings for the nine months ended September 30, 2018 significantly increased to $7.04 billion, compared to $5.14 billion in the prior year, resulting in a diluted EPS of $11.95.
  • 3Commercial Airplanes (BCA) segment revenue increased $783 million for the nine-month period, primarily due to delivery mix, with earnings from operations for BCA also showing a substantial rise.
  • 4Defense, Space & Security (BDS) segment revenue grew by $1.78 billion for the nine-month period, though segment earnings from operations decreased due to significant charges on development programs like the T-X Trainer and MQ-25.
  • 5Global Services (BGS) segment revenue increased by $1.34 billion for the nine-month period, driven by growth across its services portfolio.
  • 6The company maintained a strong backlog of $491 billion as of September 30, 2018, reflecting significant future revenue visibility.
  • 7Boeing completed the acquisition of KLX Inc. for $4.3 billion on October 9, 2018, which is expected to enhance its Global Services business.

Frequently Asked Questions

Boeing's total revenues for the third quarter of 2018 increased to $25.1 billion, up from $24.2 billion in the same period of 2017. This growth was driven by higher revenues in the Defense, Space & Security (BDS) and Global Services (BGS) segments, partially offset by a slight decrease in Commercial Airplanes (BCA) revenue.

Boeing's total backlog stood at a robust $491.2 billion as of September 30, 2018. This substantial backlog indicates strong future revenue visibility and provides a solid foundation for continued operations and growth across its various business segments.

Yes, the Defense, Space & Security (BDS) segment recorded significant charges totaling $691 million related to winning the T-X Trainer and MQ-25 competitions. Additionally, the KC-46A Tanker program continued to incur reach-forward losses. While these impacted segment profitability, overall net earnings for the company increased year-over-year due to strong performance in other areas.

On October 9, 2018, Boeing acquired KLX Inc. for $4.3 billion. This acquisition is a strategic move to strengthen Boeing's Global Services business, likely expanding its capabilities in aviation parts and services.