Aircraft. Boeing reports first quarter results
Continued progress on safe return to service of 737 MAX; resumed 787 deliveries in late March
The Boeing Company reported first-quarter revenue of $15.2 billion, primarily driven by lower 787 deliveries and commercial services volume, partially offset by higher 737 deliveries and higher KC-46A Tanker revenue. GAAP loss per share of ($0.92) and core loss per share (non-GAAP) of ($1.53) reflect year-over-year KC-46A Tanker improvement, higher 737 deliveries, and lower commercial airplanes period costs, partially offset by lower tax benefits and higher interest expense. Boeing recorded operating cash flow of ($3.4) billion.
Operating cash flow improved to ($3.4) billion in the quarter, reflecting timing of receipts and expenditures and higher 737 deliveries, partially offset by lower 787 deliveries and lower advance payments.
Cash and investments in marketable securities decreased to $21.9 billion, compared to $25.6 billion at the beginning of the quarter, primarily driven by operating cash outflows. The company refinanced $9.8 billion of debt in the quarter. Additionally, the company increased its revolving credit facilities by $5.3 billion to a total of $14.8 billion, which remain undrawn.
Total company backlog at quarter-end was $364 billion.
Commercial Airplanes first-quarter revenue decreased to $4.3 billion, driven by lower 787 deliveries, partially offset by higher 737 deliveries. First-quarter operating margin improved to (20.1) percent, primarily due to higher 737 deliveries and lower period costs.
The industry is continuing to make progress on the safe return to service of the 737 MAX worldwide. In addition, we are working closely with the FAA and our customers to address electrical issues identified in certain locations in the flight deck of select 737 MAX airplanes. Since the FAA's approval to return the 737 MAX to operations in November 2020, Boeing has delivered more than 85 B-737 MAX aircraft and 21 airlines have returned their fleets to service, safely flying more than 26,000 revenue flights totaling over 58,500 flight hours (as of April 26, 2021). The 737 program is currently producing at a low rate and continues to expect to gradually increase production to 31 per month in early 2022 with further gradual increases to correspond with market demand. The company will continue to assess the production rate plan as it monitors the market environment and engages in customer discussions.
The company also resumed 787 deliveries in late March, following comprehensive reviews to ensure each airplane meets the company's highest standards. During the quarter, the 787 program consolidated final assembly to Boeing South Carolina and transitioned to the previously announced production rate of 5 aircraft per month.
Commercial Airplanes continues to work closely with global regulators on all aspects of 777X development, including its rigorous test program, and the company still expects to deliver the first 777X in late 2023. As previously announced, the combined 777/777X production rate is transitioning to 2 aircraft per month.
Commercial Airplanes secured orders for 100 B-737 aircraft from Southwest Airlines, 25 B-737 aircraft from United Airlines, 23 B-737 aircraft from Alaska Airlines, and four 747 freighter aircraft from Atlas Air. Commercial Airplanes delivered 77 airplanes during the quarter and backlog included over 4,000 airplanes valued at $283 billion.
Defense, Space & Security
Defense, Space & Security first-quarter revenue increased to $7.2 billion and first-quarter operating margin increased to 5.6 percent, primarily reflecting higher KC-46A Tanker revenue due to orders for 27 aircraft and the absence of charges related to the program, partially offset by a pre-tax charge of $318 million on the VC-25B program largely due to COVID-19 impacts and performance issues at a key supplier.
During the quarter, Defense, Space & Security was awarded Lots 6 and 7 contracts for 27 KC-46A Tanker aircraft for the US Air Force, a contract for 11 P-8A Poseidon aircraft for the US Navy and the Royal Australian Air Force, and contracts for six Bell Boeing V-22 Osprey rotorcraft for the US Navy and the US Air Force. Defense, Space & Security completed first flight and delivery of the F-15EX for the US Air Force, successfully conducted the Space Launch System Green Run hot fire test, and began production of the T-7A Red Hawk Advanced Trainer. Other highlights for the quarter include first flight of the uncrewed Loyal Wingman aircraft for the Royal Australian Air Force and the first flight of the Japan KC-46 Tanker aircraft.
Backlog at Defense, Space & Security was $61 billion, of which 31 percent represents orders from customers outside the US.
Global Services first-quarter revenue decreased to $3.7 billion and first-quarter operating margin decreased to 11.8 percent primarily driven by lower commercial services volume due to COVID-19.
During the quarter, Global Services was awarded a ground support equipment and logistics contract for the Royal Moroccan Air Force, as well as a contract for F/A-18 and AV-8B avionics equipment repair for the US Navy. Global Services also delivered the 50th 737-800 Boeing Converted Freighter and inducted the EA-18G Growler for the US Navy Modification Program.
AVIONEWS - World Aeronautical Press Agency