The Boeing Company
) repeated its strong core performance of the previous quarter.
The defense major registered earnings per share of $1.35 which
surpassed the Zacks Consensus Estimate of $1.12.
The strong performance of the company stemmed from another
solid quarter at its commercial segment, which registered 17%
growth in commercial airplane deliveries in the period.
Total revenue grew 13% year over year to $20 billion. The top
line marginally missed the Zacks Consensus Estimate of $20.1
Boeing's Commercial Airplane segment saw a 17% rise in
deliveries to 149 units in the reported quarter. As a result,
Commercial Airplanes revenue increased by 28% to $12.2 billion on
higher delivery volume.
In the reported quarter, the company delivered 102 units of
737 series and 20 units of 777 series airplanes versus deliveries
of 100 and 21, respectively in the year-ago period. The company
also delivered 7 units of 767 (5 in the year-ago period), 8 units
of 747 and 12 units of 787. In the year-ago period, no 747 and 1
unit of 787 airplanes was delivered.
Operating margin fell 190 basis points to 9.5%, reflecting
higher period costs and the dilutive impact of 787 and 747-8
deliveries. This was partially offset by the higher deliveries
and lower research & development (R&D) expenditure.
Commercial Airplanes booked 369 net orders during the reported
quarter. Backlog at the end of the reported period remains
strong with approximately 4,100 airplanes valued at a record $307
Boeing Defense, Space & Security
The Boeing Defense, Space & Security segment witnessed a
4% decline in its quarterly revenue to $7.84 billion. Among its
sub-segments Boeing Military Aircraft ("BMA") and Network &
Space Systems ("N&SS") witnessed a top-line dip of 4% and
Quarterly operating margin grew by 50 basis points to
10.5%. The operating margin of this segment was driven by
Boeing Military Aircraft's strong performance across various
programs. While softness in the performance from N&SS and
Global Services & Support ("GS&S") impacted results.
Backlog at Defense, Space & Security segment remained at
$71 billion, keeping the backlog to more than two times the
unit's projected 2012 revenue.
Boeing Capital Corporation (BCC)
Boeing Capital Corporation reported quarterly revenues of $101
million compared with $126 million in the year-ago quarter. The
segment registered earnings of $33 million compared with earnings
of $19 million in the year-ago period. At quarter-end, BCC's
portfolio balance remained unaltered at $4.1 billion.
Total costs and expenses of the company during the reported
quarter were $49.60 billion, up 25.2%, mainly due to the increase
in the cost of products sold. Despite the rise in cost, total
revenue growth helped Boeing to register a 10.2% increase in
earnings from operation to reach $9.8 billion.
Boeing's cash and cash equivalents as on September 30, 2012
were $6.6 billion and short-term investments of $4.6 billion.
Cash and cash equivalents as on December 31, 2011 were $10.05
billion versus and short-term investments of $1.22 billion.
In the first nine months of the year, the company generated
$3.34 billion of cash from operations compared with $1.09 billion
generated in the year-ago period. Long-term debt in the aforesaid
period decreased to $9.01 billion from $10.0 billion at the end
Taking into account its performance in the first nine months
of 2012, Boeing raised its full year 2012 earnings per share
guidance to a range of $4.80-$4.95 from its earlier guidance
range of $4.40-$4.60. The company also raised its revenue
guidance for 2012 to the range of $80.5 billion - $82 billion
versus the earlier range of $79.5 billion-$81.5 billion.
The company maintained its Commercial Airplanes' 2012
deliveries for 2012 between 585 and 600 airplanes, which are
already sold out. This includes an expected 70 to 85 787 and
747-8 deliveries. Commercial Airplanes' 2012 revenue is expected
to be between $47.5 billion and $49.5 billion with operating
margin hovering around 9.0%.
In the defense space, the company expects defense revenue for
2012 to be between $32.5 billion and $33.0 billion versus its
earlier range of $31.5 billion and $32.0 billion with operating
margin greater than 9%. Boeing Capital Corporation expects that
its aircraft finance portfolio will continue to decline in
Boeing's 2012 R&D expenditure forecast is between $3.3
billion and $3.5 billion. Capital expenditures for 2012 are
expected to be approximately $1.8 billion, down from $2.0
BOEING CO (BA): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis
To read this article on Zacks.com click here.
Lockheed Martin Corporation
), one of Boeing's peers, reported third quarter financial
results today. On the revenue front, Lockheed Martin reported
quarterly net sales of $11.9 billion, beating the Zacks Consensus
Estimate of $11.1 billion by $698 million. However, the figure
fell below the year-ago quarterly revenue of $12.1 billion.
Lockheed reported third-quarter 2012 earnings of $2.26 per share,
beating the Zacks Consensus Estimate of $1.85. This was also
higher than the year-ago quarterly earnings of $2.06 per share.
Boeing once again registered a solid performance this quarter.
The most laudable part of this success story is its consistent
growth in workforce and backlog over the last nine months.
Boeing's upward revision in the guidance suggests that this
positive trend will continue to last through 2012.
Boeing Co. retains a short-term Zacks #3 Rank (Hold rating). We
have a long-term Neutral recommendation on the stock.
Chicago-based, Boeing is a major operator in both commercial
airline and defense sectors. Its global customer base includes
individuals, organizations and governments. With a market
capitalization of $54.75 billion, the company has 171,700 full