Boeing reports record 2018 results and provides 2019 guidance

Fourth Quarter 2018

  • Record revenue of $28.3 billion and record operating profit of $4.2 billion driven by higher volume
  • Record GAAP EPS of $5.93 and record core EPS (non-GAAP)* of $5.48 on strong performance

Full-Year 2018

  • Record revenue of $101.1 billion reflecting strong growth across the portfolio
  • Record GAAP EPS of $17.85 and record core EPS (non-GAAP)* of $16.01 driven by solid execution
  • Record operating cash flow of $15.3 billion; repurchased 26.1 million shares for $9.0 billion
  • Total backlog remains robust at $490 billion, including nearly 5,900 commercial airplanes
  • Cash and marketable securities of $8.6 billion provide strong liquidity

Outlook for 2019

  • Revenue guidance of between $109.5 and $111.5 billion reflects higher volume across all businesses
  • GAAP EPS of between $21.90 and $22.10; core EPS (non-GAAP)* of between $19.90 and $20.10
  • Operating cash flow expected to increase to between $17.0 and $17.5 billion

 

Table 1. Summary Financial Results

Fourth Quarter

Full Year

(Dollars in Millions, except per share data)

2018

2017

Change

2018

2017

Change

Revenues

$28,341

$24,770

14%

$101,127

$94,005

8%

GAAP

Earnings From Operations

$4,175

$2,978

40%

$11,987

$10,344

16%

Operating Margin

14.7%

12.0%

2.7 Pts

11.9%

11.0%

0.9 Pts

Net Earnings

$3,424

$3,320

3%

$10,460

$8,458

24%

Earnings Per Share

$5.93

$5.49

8%

$17.85

$13.85

29%

Operating Cash Flow

$2,947

$2,903

2%

$15,322

$13,346

15%

Non-GAAP*

Core Operating Earnings

$3,867

$2,589

49%

$10,660

$8,906

20%

Core Operating Margin

13.6%

10.5%

3.1 Pts

10.5%

9.5%

1.0 Pts

Core Earnings Per Share

$5.48

$5.07

8%

$16.01

$12.33

30%

*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.”    

The Boeing Company reported fourth-quarter revenue of $28.3 billion, GAAP earnings per share of $5.93 and core earnings per share (non-GAAP)* of $5.48, all company records. These results reflect record commercial deliveries, higher defense and services volume and strong performance which outweighed favorable tax impacts recorded in the fourth quarter of 2017 (Table 1). Boeing generated operating cash flow of $2.9 billion, repurchased 1.6 million shares for $0.6 billion, paid $1.0 billion of dividends and completed the acquisition of KLX.

Revenue was a record $101.1 billion for the full year reflecting higher commercial deliveries and increased volume across the company. Records for GAAP earnings per share of $17.85 and core earnings per share (non-GAAP)* of $16.01 were driven by higher volume, improved mix and solid execution.

“Across the enterprise our team delivered strong core operating performance and customer focus, driving record revenues, earnings and cash flow and further extending our global aerospace industry leadership in 2018,” said Boeing Chairman, President and Chief Executive Officer Dennis Muilenburg. “Our financial performance provided a firm platform to further invest in new growth businesses, innovation and future franchise programs, as well as in our people and enabling technologies. In the last 5 years, we have invested nearly $35 billion in key strategic areas of our business, all while increasing cash returns to shareholders.”

“Our One Boeing focus, clear strategies for growth, and leading positions in large and growing markets, give us confidence for continued strong performance, revenue expansion and solid execution across all three businesses, which is reflected in our 2019 guidance.”

“We remain focused on executing on our production and development programs as well as our growth strategy while driving further productivity, quality and safety improvements, investing in our team and creating more value and opportunity for our customers, shareholders and employees.”Commercial Airplanes fourth-quarter revenue increased to $17.3 billion reflecting higher deliveries and favorable mix (Table 4). Fourth-quarter operating margin increased to 15.6 percent, driven by higher 737 volume and strong operating performance on production programs, including higher 787 margins.

During the quarter, Commercial Airplanes delivered 238 airplanes, including the delivery of the 787th 787 Dreamliner and the first 737 MAX Boeing Business Jet. The 737 program delivered 111 MAX airplanes in the fourth quarter, including the first MAX delivery from the China Completion Center, and delivered 256 MAX airplanes in 2018.

The first 777X flight test airplane completed final body join and power-on, and the program remains on track for flight testing this year and first delivery in 2020.

Video: Boeing 777X cabin:

Commercial Airplanes booked 262 net orders during the quarter, valued at $16 billion. Backlog remains robust with nearly 5,900 airplanes valued at $412 billion.

Outlook

Effective in the first quarter of 2019, the Company is making a change to the accounting for military derivative aircraft. Revenues and costs associated with military derivative aircraft were previously reported in the Commercial Airplanes and Defense, Space & Security segments. Beginning in 2019, all revenues and costs associated with military derivative aircraft will be reported in the Defense, Space & Security segment. An additional exhibit is included on page 15 with restated 2018 results adjusted for the change in accounting for military derivative aircraft as well as the realignment of certain programs between Global Services and Defense, Space & Security. The Company has provided this comparable information in the exhibit and below to help investors understand the 2019 financial outlook (Table 8).

*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.”

1 Continues to include intercompany deliveries related to military derivative aircraft

2 Approximately $1.1 billion of pension expense is expected to be allocated to the business segments

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