01—Abstract
Summary
Summary of the 10-Q filed October 24, 2018. Cited figures are marked; the original filing is the authoritative source.
Boeing reported strong top-line growth in the third quarter and year-to-date 2018, with total revenues increasing to $25.1 billiona 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 billionb 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 $4.07c for the quarter and $11.95 year-to-date. The company's backlog remains robust at $491 billion, indicating strong future revenue potential.
02—Key points
Key Highlights
- Total 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.
- Net 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.
- Commercial 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.
- Defense, 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.
- Global Services (BGS) segment revenue increased by $1.34 billion for the nine-month period, driven by growth across its services portfolio.
- The company maintained a strong backlog of $491 billion as of September 30, 2018, reflecting significant future revenue visibility.
- Boeing completed the acquisition of KLX Inc. for $4.3 billion on October 9, 2018, which is expected to enhance its Global Services business.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2018, Boeing Co kept $0.09.
- Revenue$25.15B100.0%
- Cost of revenue−$21.04B83.7%
- Gross profit$4.11B16.3%
- Operating costs−$1.88B7.5%
- Operating income$2.23B8.9%
- Interest, other & tax$136.0M0.5%
- Net income$2.36B9.4%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2018filed October 24, 2018Financial Statements
Q3 FY2018 against Q3 FY2017
| Line item | Q3 FY2018Q3 FY2017 | Change |
|---|---|---|
| Revenue | $25.15B$24.22B | +3.8% |
| Cost of Revenue | $21.04B$19.96B | +5.4% |
| Gross Profit | $4.11B$4.27B | −3.8% |
| R&D Expenses | $826.00M$768.00M | +7.6% |
| Operating Income | $2.23B$2.63B | −15.3% |
| Net Income | $2.36B$1.81B | +30.6% |
| EPS (Basic) | $4.11$3.03 | +35.6% |
| EPS (Diluted) | $4.07$2.99 | +36.1% |
| Shares Outstanding (Basic) | 574.80M598.30M | −3.9% |
| Shares Outstanding (Diluted) | 580.20M605.60M | −4.2% |
05—Questions
Frequently Asked Questions
How did Boeing's revenue perform in the third quarter of 2018 compared to the previous year?
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.
What is the current status of Boeing's backlog, and what does it indicate for future performance?
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.
Were there any significant charges or losses impacting the company's profitability in this quarter?
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.
What is the significance of the KLX Inc. acquisition?
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.
06—Continue