Boeing Flies High on Strong Commercial Aircraft Sales in Third-Quarter 2010

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Boeing Company (NYSE:BA) (Chicago, Illinois), a leading aerospace production and services firm, reported steady growth in the third quarter of 2010, citing stronger commercial airplane deliveries and volumes. Net earnings were reported to be $837 million, compared with a net loss of $1.56 billion in the third quarter of 2009.

Total revenues stood at $16.97 billion for the quarter, a 1.67% increase from the same period last year. Boeing's backlog for both the Commercial Airplanes and Defense, Space & Security segments increased to a total of $320.9 billion, a 2.75% increase from this year's second quarter.

The overall improvement was largely influenced by the Commercial Airplanes segment, which saw a total of 124 deliveries and 221 net orders booked, compared with 113 and 79, respectively, in third-quarter 2009. However, earnings and revenues were lower in the Defense, Space & Security segment, where fewer deliveries and volumes impacted the bottom line.

"Although the pace of the global economic recovery has moderated in certain areas, we continue to see growth in air travel worldwide," said Jim McNerney, the chairman, president and chief executive officer of Boeing, in a conference call. "This growth is being experienced in all regions, with emerging markets continuing to show the strongest recovery, and both passenger and freighter markets rebounding more sharply than originally anticipated. That said, while the growth has begun to moderate--as last year at this time, when the industry began to expand from its low recessionary levels--yields remain strong, due to the disciplined capacity management by the airlines over the past few years."

Although the numbers in the Commercial Airplanes segment boosted Boeing's overall results, weaker results in the Military Aircraft and Network & Space businesses weighted down Defense, Space & Security:

• The Commercial Airplanes segment saw net earnings of $1.02 billion, compared with a net loss of $2.84 billion in third-quarter 2009, and total revenues of $8.75 billion, a 10.99% increase from the same period last year.
• The Defense, Space & Security segment reported net earnings of $684 million, a 22.71% decrease from third-quarter 2009, and total revenues of $8.18 billion, a 6.43% decrease:
• The Military Aircraft business saw net earnings of $312 million, a 35% decrease from third-quarter 2009, and total revenues of $3.79 billion, a 5.25% decrease.
• The Network & Space Systems business reported net earnings of $152 million, a 39.68% decrease from third-quarter 2009, and total revenues of $2.34 billion, a 13.54% decrease.
• The Global Services & Support business saw net earnings of $220 million, a 43.79% increase from third-quarter 2009, and total revenues of $2.05 billion, a 0.74% increase.
• The Boeing Capital Corporation reported net earnings of $45 million, a 15.38% increase from the same period last year, and total revenues of $170 million, a 2.41% increase.
• Boeing Engineering, Operations and Technology and other segments saw a total net loss of $132 million, compared with a net loss of $36 million in third-quarter 2009, and total revenues of $27 million, a 47.06% decrease.

Boeing expects revenue for full-year 2011 to exceed that of 2010, and it believes the improvements in the Commercial Airplanes segment will continue to positively affect the overall results for the remainder of this year. The company has narrowed its revenue guidance for full-year 2010 to between $64.5 billion and $65.5 billion, and estimates that revenues will total $31.5 billion in the Commercial Airplanes segment and between $32 billion and $33 billion in the Defense, Space & Security segment.

"Looking forward, with healthy core operations and a total company backlog exceeding $320 billion, which is close to five times our current annual revenue, we have a solid foundation for growth," McNerney said in the conference call.

Among the largest active Boeing projects in the U.S. is the $750 million expansion of an aircraft parts manufacturing plant in North Charleston, South Carolina, which includes the construction of a second assembly line for the 787 Dreamliner wide-body jetliner. For more information, visit Industrial Info's North American Industrial Manufacturing Project Database.

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