The Boeing Company has reported second-quarter revenue of US$24.3 billion reflecting higher commercial deliveries and mix, defense volume and services growth. GAAP earnings per share increased to US$3.73 and core earnings per share (non-GAAP) increased to US$3.33 reflecting solid execution across the company. Results also reflect a charge related to the previously announced Spirit litigation outcome ($0.21 per share). Boeing delivered strong operating cash flow of US$4.7 billion, repurchased US$3.0 billion of shares, and paid US$1.0 billion of dividends.
The company’s revenue guidance increased US$1 billion to between US$97.0 and US$99.0 billion, driven by defense volume and services growth. Commercial Airplanes margin guidance is increased to greater than 11.5% on strong performance and Defense, Space & Security margin guidance was adjusted to reflect the impact of cost growth on the KC-46 Tanker program.
Boeing Commercial Airplanes second-quarter revenue was US$14.5 billion reflecting higher deliveries and mix. Second-quarter operating margin increased to 11.4%, reflecting strong operating performance on production programs, including a higher 787 margin, partially offset by a charge of US$307 million related to cost growth on the KC-46 Tanker program. This cost growth was primarily due to higher estimated costs of incorporating changes into six flight test and two early build aircraft as well as additional costs as it progress through late stage testing and the certification process. Boeing continues to make steady progress towards final certification for KC-46 Tanker and recently completed all flight tests required to deliver the first aircraft, which is expected to be in October this year as now agreed upon with the U.S. Air Force.
During the quarter, Commercial Airplanes delivered 194 airplanes, including delivery of the first 737 MAX airplanes to Jet Airways, Ethiopian Airlines, and Xiamen Airlines. The 737 MAX program celebrated the one year anniversary of entering revenue flight service and continues to be well received in the market with over 4,600 orders since its launch. The 777X program remains on track for delivery in 2020 as the first two test airplanes moved into the low-rate initial production line.
Commercial Airplanes booked 239 net orders during the quarter, including 91 widebodies. Backlog remains robust with nearly 5,900 airplanes valued at US$416 billion.
