Boeing Q1 Earnings Review: Earnings Fall Short Of Estimates While Revenues Driven By Higher Aircraft Deliveries In Defense Segment

April 28th, 2016 by Trefis Team
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The Boeing Company

Boeing (NYSE:BA) posted a 22% decrease in earnings while reporting a marginal increase in revenues the first quarter. The primary reason for the fall in earnings was attributed to a one-time charge that the company incurred in the development of a tanker aircraft. The company reported an EPS of $2.83 which is one cent short of the consensus estimate. Revenues were driven primarily by the higher deliveries of the F-15 and C-17 military aircraft.

Highlights from the quarter:

  • As mentioned previously, earnings took a hit this quarter because of a one time charge of $162 million incurred in the development of the KC-46 tanker. Furthermore, the company spent approximately $148 million on R&D and took a $70 million charge on the 747 program.
  • Deliveries in the Commercial Airplanes segment saw a decrease for the quarter. Total deliveries fell from about 184 to 176 aircraft. Despite this pitfall, Boeing reiterated plans to boost production in the coming years. The company is aiming to deliver more than 900 airplanes a year by the end of the decade.
  • The company hopes to increase the production of the 737 airplane from 42 per month to 47 per month as early as next year, further increasing production to 57 per month by 2019. The production of the 787 family increased to 12 per month this quarter and is expected to reach 14 by the end of the decade.
  • The company bought back about 3.5 billion shares this quarter while paying out $700 million in dividends.
  • Boeing has a $480 billion (down from $489 billion) backlog with 5,700 commercial plane orders.

Given all the information above, it seems like Boeing is still on a good growth trajectory. The new products and additional deliveries could help boost the top line, while the backlog will ensure a busy few years to come.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment / ask questions on the comments section
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis of Boeing

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