Summary
Boeing reported a significant decline in revenues and earnings for the nine months and third quarter ended September 30, 2019, primarily driven by the ongoing grounding of its 737 MAX aircraft. Total revenues for the nine months decreased by $14.1 billion to $58.6 billion, while earnings from operations plummeted from $7.8 billion to $229 million. The company incurred a substantial $5.6 billion charge in the second quarter related to estimated customer concessions and disruptions caused by the 737 MAX grounding. Despite the significant headwinds in the Commercial Airplanes segment, the Defense, Space & Security (BDS) and Global Services (BGS) segments showed revenue growth, driven by specific program wins and acquisitions. However, the overall financial performance was heavily overshadowed by the 737 MAX crisis, which not only halted deliveries and reduced production rates but also led to increased production costs for the affected aircraft and significant charges for customer compensation. Boeing continues to work with regulatory authorities for the 737 MAX's return to service, but uncertainties surrounding the timing and conditions of this return pose a material risk to future financial performance.
Financial Highlights
55 data points| Revenue | $19.98B |
| Cost of Revenue | $16.93B |
| Gross Profit | $3.05B |
| R&D Expenses | $778.00M |
| Operating Income | $1.26B |
| Net Income | $1.17B |
| EPS (Basic) | $2.07 |
| EPS (Diluted) | $2.05 |
| Shares Outstanding (Basic) | 565.20M |
| Shares Outstanding (Diluted) | 568.60M |
Key Highlights
- 1Total revenues for the nine months ended September 30, 2019, were $58.65 billion, a significant decrease from $72.79 billion in the same period of 2018.
- 2Earnings from operations for the nine months ended September 30, 2019, were only $229 million, a dramatic drop from $7.81 billion in the prior year, largely due to the 737 MAX grounding.
- 3A substantial charge of $5.61 billion was recorded in the second quarter of 2019 for estimated concessions and other considerations to customers due to the 737 MAX grounding.
- 4The Commercial Airplanes (BCA) segment reported a loss from operations of $3.81 billion for the nine months, compared to earnings of $5.23 billion in the prior year, directly impacted by the 737 MAX situation.
- 5Defense, Space & Security (BDS) segment revenues increased by $747 million to $20.27 billion, and Global Services (BGS) revenues rose by $1.67 billion to $13.82 billion for the nine months, showing resilience.
- 6Inventories increased significantly to $73.28 billion from $62.57 billion, largely due to the continued production of 737 MAX aircraft without deliveries.
- 7Net cash used by operating activities for the nine months was $226 million, a stark contrast to $12.38 billion provided in the prior year, primarily due to the 737 MAX grounding impacts on inventory and customer payments.