A RECORD performance from the defence division in 1994 left McDonnell Douglas (MDC) showing its highest-ever profits, despite a further decline in civil-aircraft sales.
The group ended the year with net profits of $598 million, an improvement of more than $200 million on 1993. Operating profits also broke through the $1 billion mark for the first time.
The defence division led the way with its own series of records, turning in an operating profit of $708 million on its highest-ever sales of $7.8 billion. MDC says that the improvement came through strong performances on the F-18 and restructured C-17 programme.
The slimmed-down commercial-aircraft business also managed to lift operating profits marginally to $47 million, despite seeing sales plummet by more than one-third, to $3.2 billion. New-aircraft deliveries slumped to only 22 MD-80s and 17 MD-11s, virtually half of the 1993 output, while the net increase in orders was only three (Flight International, 18-24 January).
MDC says that commercial-aircraft profits were helped by a lower development expenditure and $32 million received from risk-sharing sub-contractors. These include Alenia, whose parent Finmeccanica group is still in talks over taking a stake in the Douglas Aircraft business.
MDC also gained $50 million in operating profits and $326 million in revenues from its financing arm, the portfolio of which includes leased aircraft.
The group highlights its improving financial performance, with cash flow from aerospace operations close to the $1 billion mark and debts down by more than 20%, at $1.6 billion. Workforce cuts during the year took group employment down, from 70,000 to below 65,800.
Source: Flight International
