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Table 1. Summary Financial Results |
First Quarter |
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(Dollars in Millions, except per share data) |
2014 |
2013 |
Change |
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Revenues |
$20,465 |
$18,893 |
8% |
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Non-GAAP* |
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Core Operating Earnings |
$2,095 |
$1,867 |
12% |
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Core Operating Margin |
10.2% |
9.9% |
0.3 Pts |
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Core Earnings Per Share |
$1.76 |
$1.73 |
2% |
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Operating Cash Flow Before Pension Contributions |
$1,112 |
$524 |
112% |
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GAAP |
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Earnings From Operations |
$1,542 |
$1,528 |
1% |
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Operating Margin |
7.5% |
8.1% |
(0.6) Pts |
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Net Earnings |
$965 |
$1,106 |
(13)% |
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Earnings Per Share |
$1.28 |
$1.44 |
(11)% |
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Operating Cash Flow |
$1,112 |
$524 |
112% |
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* Non-GAAP measures (core operating earnings, core operating margin and core earnings per share) exclude certain components of pension and post retirement benefit expense that management believes are not reflective of underlying business performance. Complete definitions of Boeing’s non-GAAP measures are on page 7, „Non-GAAP Measures Disclosures.” |
The Boeing Company (NYSE: BA) reported first-quarter revenue increased 8 percent to $20.5 billion on higher commercial volume (Table 1). Core earnings per share (non-GAAP) increased 14 percent* to $1.76 when excluding a benefit of $0.19 per share for the 2012 research and development tax credit recorded in the first quarter of 2013. First-quarter 2014 core operating earnings (non-GAAP) increased 12 percent to $2.1 billion and core operating margin (non-GAAP) increased to 10.2 percent reflecting continued strong operating performance. GAAP earnings from operations included previously announced non-cash charges totaling $334 million ($0.29 per share) for retirement plan changes.
Core earnings per share guidance for 2014 increased to between $7.15 and $7.35, from $7.00 to $7.20, to reflect the benefit of a tax settlement to be recognized in the second quarter of 2014. GAAP earnings per share guidance for 2014 is reaffirmed at between $6.10 to $6.30 as the tax settlement benefit was offset by the retirement plan charges. GAAP pension expense guidance for 2014 is now at approximately $3.2 billion, up from $3.1 billion, to reflect the retirement plan charges. The company reaffirmed its 2014 revenue, operating cash flow and deliveries guidance.
„Disciplined execution across our production and development programs produced strong first quarter results,” said Boeing Chairman and Chief Executive Officer Jim McNerney. „We measurably increased revenue, core operating earnings and cash flow, and expanded core operating margins. This financial and operational strength enabled the return of more than $3 billion to shareholders in the quarter through share repurchase and an increased dividend, even as we continued to invest in our future.”
„Our outlook for the full year remains positive on the strength of demand for our fuel-efficient new commercial airplanes, our solid position in global defense, space and security markets, and our enterprise focus on meeting customer commitments, improving productivity and profitably delivering the growth in our sizable backlog,” McNerney said.
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Table 2. Cash Flow |
First Quarter |
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(Millions) |
2014 |
2013 |
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Operating Cash Flow Before Pension Contributions* |
$1,112 |
$524 |
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Pension Contributions |
— |
— |
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Operating Cash Flow |
$1,112 |
$524 |
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Less Additions to Property, Plant & Equipment |
($497) |
($521) |
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Free Cash Flow* |
$615 |
$3 |
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Operating cash flow in the quarter was $1.1 billion, reflecting commercial airplane production rates, strong core operating performance and timing of receipts and expenditures (Table 2). During the quarter, the company repurchased 19.4 million shares for $2.5 billion, leaving $8.3 billion remaining under the current repurchase authorization expected to be completed over the next 2-3 years. The company also paid $0.5 billion in dividends in the quarter, reflecting an approximately 50 percent increase in dividends per share compared to the same period of the prior year.
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Table 3. Cash, Marketable Securities and Debt Balances |
Quarter-End |
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(Billions) |
Q1 14 |
Q4 13 |
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Cash |
$6.9 |
$9.1 |
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Marketable Securities1 |
$5.3 |
$6.2 |
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Total |
$12.2 |
$15.3 |
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Debt Balances: |
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The Boeing Company, net of intercompany loans to BCC |
$6.3 |
$7.0 |
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Boeing Capital Corporation, including intercompany loans |
$2.6 |
$2.6 |
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Total Consolidated Debt |
$8.9 |
$9.6 |
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1 Marketable securities consists primarily of time deposits due within one year classified as „short-term investments.” |
Cash and investments in marketable securities totaled $12.2 billion at quarter-end (Table 3), down from $15.3 billion at the beginning of the year, primarily due to the share repurchases and the pay-down of maturing debt. Debt was $8.9 billion, down from $9.6 billion at the beginning of the year, primarily due to maturities.
Total company backlog at quarter-end was a $440 billion, down slightly from the beginning of the year, and included net orders for the quarter of $19 billion.