Boeing’s revenue reached a record $101 billion in 2018, partly helped by a turnaround in the company’s defence unit, which won several large contracts thereby reversing more than a decade of declining sales.
Boeing Defense, Space & Security’s revenue grew to $23.2 billion last year, rising 13% from the year prior, the company said in a financial filing. Though, the division’s profit declined 27% to $1.59 billion for the year.
Previously, Boeing's defence revenues had fallen by more than one-third over the timeline of a decade: from $32.1 billion in 2007 to $21.1 billion in 2017. But, President Donald Trump’s higher defence spending and a string of three new military contracts put the manufacturer back in the game last year.
The company now projects its defence revenue in 2019 will reach $26.5 billion - $27.5 billion, a topline rise of more than 14%.
Boeing Defense’s back-order log is also growing and was $57 billion at the end of 2018, about 29.5% higher than the year prior. The aerospace firm says 30 percent of its defence back-orders were placed by foreign militaries.
The defence business is still dwarfed by Boeing Commercial Aircraft which posted $60.7 billion in revenue in 2018, up 5% from the year prior. Boeing Global Services is also nipping at the division’s heels, growing to $17 billion in sales, up 17% from the year prior.
Boeing MH-139 helicopter
Boeing also said it plans to reorganise its military derivative aircraft programmes. Beginning in 2019, all revenues and costs associated with military derivative aircraft, such as the 737-based P-8 Poseidon maritime patrol aircraft or the 767-2C freighter-based KC-46A Pegasus air tanker, will be reported solely in the Defense, Space & Security segment. Previously, revenues and costs associated with military derivative aircraft were shared between the Boeing Commercial Airplanes and Defense, Space & Security segments.
Boeing’s 2018 sales benefited from a US Navy order for 24 F/A-18 Super Hornets and Kuwait’s order of 22 F/A-18E and six F/A-18F Super Hornets. But most significant to the company’s order logs were a series of three new aircraft programmes awarded in August and September.
On 31 August, the USN awarded the company an $805 million contract to develop and produce four MQ-25A Stingray carrier-based unmanned refueling aircraft. A few weeks later, on 24 September, the firm was granted the first portion of a $2.38 billion firm, fixed-price contract to replace the USAF's Bell UH-1N utility helicopter fleet with the MH-139, developed with Leonardo Helicopters from the commercial AW139. Then, three days later, the USAF selected it for its $9.2 billion T-X requirement, covering the production of 351 jet trainers, plus 46 simulators and associated ground equipment.
Boeing chief executive Dennis Muilenburg said on a January 30 earnings call that the company is ground-testing the MQ-25A and plans to fly the aircraft for the first time in 2019.