Wednesday, aerospace giant Boeing Co. (BA) reported a 19% decline in earnings for the second quarter, while revenues slipped less than a percent from the previous year period. The company noted that the results were affected by a charge for the Airborne Early Warning & Control or AEW&C program and lower profitability due to mix and timing in Commercial Airplanes, partially offset by lower centralized costs. Additionally, the company reaffirmed its earnings per share guidance for 2008 and 2009.
Among others in the industry, General Dynamics Corp. (GD), on Wednesday, posted a 25% rise in second-quarter profit on strong sales of combat vehicles and business jets. The company also lifted the full-year earnings guidance to a range above analysts' current estimate.
Defense contractor Lockheed Martin Corp. (LMT), on Tuesday, reported a 13% increase in second-quarter profit helped by higher unusual items and net sales that beat market projections, despite an 8% decline in Aeronautics sales. Quarterly net sales rose 4% from last year.
Another peer, Northrop Grumman Corp. (NOC) is expected to report second-quarter results on July 29. Analysts project earnings of $1.40 per share for the quarter, on revenues of $8.28 billion. Raytheon Co. (RTN), another competitor, has scheduled the release of its second-quarter results for July 24. Analysts expect earnings of $0.93 per share on revenues of $5.63 billion.
Chicago, Illinois-based Boeing said second quarter net income dropped to $852 million or $1.16 per share from $1.050 billion or $1.35 per share reported for the same period last year. Results for the latest quarter included a charge of $0.22 per share. The company had, on July 10, said that its second quarter financial results would include a charge of about $0.22 per share on previously acknowledged delays on its AEW&C program.
On average, 16 analysts polled by First Call/Thomson Financial expected second quarter earnings of $1.23 per share.
Total revenues edged down to $16.962 billion from $17.028 billion. The Street estimated second quarter revenues of $17.24 billion.
Among segments, Boeing Commercial Airplanes or BCA reported a 2% decline in second-quarter revenues at $8.567 billion, driven by customer and model mix and lower aircraft trading revenues, partially offset by higher delivery unit volume. Boeing Integrated Defense Systems reported second-quarter revenue of $7.934 billion, a less than 1% decline from last year.
Boeing Military Aircraft, known as Precision Engagement & Mobility Systems until recently, reported second-quarter revenues slightly lower at $3.3 billion because of fewer aircraft deliveries. Revenues in Network & Space Systems declined slightly to $2.8 billion on lower Proprietary volume. Support Systems reported 11% growth in revenues to $1.839 billion. Boeing Capital Corp. reported revenues of $179 million, down 15% from last year.
For the first half of 2008, Boeing's net income grew to $2.063 billion or $2.79 per share from $1.927 billion or $2.48 per share reported in the previous year. Revenue grew 2% to $32.952 billion from $32.393 billion.
Cash and cash equivalents as of June 30 2008 were $5.619 billion, while they were $7.042 billion as of December 31 2007.
Among other events, the world's biggest-selling plane manufacturer said the progress on the new 787 Dreamliner continues on the revised schedule announced in April. After completing the power-on milestone, the program is in the final stages of assembly of the first airplane in preparation for flight test. The company has placed high hopes on these fuel-efficient planes, as surge in fuel prices is likely to lead to higher demand for them.
Boeing reaffirmed its 2008 earnings per share guidance of between $5.70 and $5.85 as well as its 2009 earnings per share guidance of between $6.80 and $7.00.
For 2008, earnings per share expectation continues to be in the range of $5.70-$5.85 per share. Revenue guidance is between $67 billion and $68 billion. Analysts currently expect earnings of $5.86 per share on revenues of $68.32 billion.
The company's earnings per share guidance for 2009 remains at $6.80-$7.00 per share. Revenues are expected to be between $72 billion and $73 billion. The Street currently looks for earnings of $6.96 per share on revenues of $72.51 billion.
On a divisional basis, BCA revenue guidance for 2008 remains at $34.5 billion to $35 billion, while fiscal 2009 revenue is expected to grow between $37 billion and $38 billion. Commercial Airplanes' 2008 delivery is still expected to be between 475 and 480 airplanes and is sold out, with 2009 expectation of between 500 and 505 commercial airplanes. Boeing also expects to deliver more airplanes in 2010 than in 2009. IDS revenue guidance for 2008 is $32 billion to $33 billion, and for 2009 is between $33.5 billion and $34.5 billion.
Commenting on the outlook, Boeing's Chairman, President and CEO Jim McNerney said: "While we faced some challenges this quarter that affected our results, we remain confident in our outlook for the remainder of this year and 2009. Strong global demand for our products and services, a record backlog, and a sustained focus on productivity improvement and execution will continue to drive growth and profitability for this company."
At the end of a series of widely published efforts, the aircraft manufacturer earlier in the month managed to make U.S. Department of Defense reopen the bidding process for a $35 billion midair refueling tanker contract for the U.S. Air Force. In late February, the Air Force selected defense contractor Northrop Grumman and Airbus maker European Aeronautic Defense & Space Co. to build 179 midair refuelers in the next fifteen years to replace its ageing KC-135 tankers.
The protest filed by Boeing, the Pentagon's No. 2 contractor, alleged more than hundred violations of proper contracting practices, eight of which were sustained by the Government Accountability Office, the investigative arm of Congress. The 67-page GAO report cited "significant errors" in Air Force recruiting practices. The announcement paves the way for Boeing to once again try to win one of the most costly contracts in Pentagon's history.
BA is currently trading at $66.67, down $2.59 or 3.74%, on 4.06 million shares. For the past year, the shares trended in the range of $62.02-$107.83.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.