Boeing’s third quarter revenues up 12%

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Boeing’s third-quarter net earnings increased to $1.1bn compared with $694m in the same period last year. Higher aircraft deliveries helped push revenues up by 12% to $16.5bn.  Earnings from operations rose to $1.5bn, yielding a healthy 9.1% operating margin.

Boeing Commercial Airplanes (BCA) third-quarter revenues increased 23% to $8.3bn on a 9% increase in deliveries to 109 aircraft, as well as higher commercial aviation services revenue. Operating earnings grew 46% to $945m and operating margins expanded to 11.4%.

For the first nine months of the year, BCA revenues rose 18% to $24.5bn on a 12% increase in aircraft deliveries. Operating earnings grew 26% to $2.6bn and margins expanded to 10.6%, driven by higher delivery volume and services sales. BCA booked 354 gross orders during the quarter and 903 in the first nine months. Its contractual backlog rose to a record $224bn, increasing 46% in the last year to more than seven times BCA's 2006 revenues.

As previously disclosed, Boeing rescheduled the first flight of the Boeing 787 and its initial deliveries. The company expects the first flight to occur around the end of the first quarter of 2008 and first delivery in late November or December of 2008.

Boeing Capital Corporation (BCC) continued to deliver strong financial performance while reducing portfolio risk. For the quarter, BCC reported pre-tax earnings of $61m compared to $122m in the same period last year. BCC's portfolio balance at the end of the quarter was $6.8bn, down from $8bn at the beginning of the year.

2007 Outlook

BCA expects to deliver approximately 440 aircraft this year, and is sold out. Revenue guidance for 2007 is unchanged at approximately $33bn and operating margin guidance remains approximately 10.5%.
Aircraft deliveries in 2008 are sold out and are expected to be between 480 and 490, down from 515 to 520, based on the new 787 delivery schedule.

BCA’s 2008 revenue is expected to grow to between $35bn and $36bn, down from previous guidance of $39bn to $40bn, while margins are expected to expand to approximately 11%. BCA expects to deliver more aircraft in 2009 than in 2008.
Boeing's 2007 revenue guidance is now approximately $66bn, up from approximately $65bn. Revenue guidance for 2008 is now $67.5bn to $68.5bn, down from $71bn to $72bn due to the revised 787 delivery schedule.

Operating cash flow for the year is now expected to be greater than $9bn compared to prior guidance of greater than $6bn, and cash flow guidance for 2008 is reduced to greater than $3bn from greater than $7bn. Boeing's total research and development forecast for 2007 is unchanged at approximately $3.7bn. R&D guidance for 2008 has been increased to between $3.2bn and $3.4bn from $2.8bn to $3bn.