Boeing reports Q4 net profit of $1.47 billion

Boeing Company has reported net income of $1.47 billion, or $2.02 per share for the quarter ended 31 December 2014, compared with $1.23 billion, or $1.61 per share, a year earlier, helped by record commercial airplane orders in 2014.

Chicago, US-based Boeing reported record fourth-quarter revenue of $24.5 billion on higher deliveries while its core earnings per share increased 23 per cent to $2.31, reflecting strong performance across the company.

For the fourth quarter, Boeing said, its core operating earnings, excluding volatile pension-funding obligations, increased to $2.3 billion or $2.31 per share.

Fourth-quarter 2013 results included a $406 million non-cash charge ($0.34 per share) related to the A-12 settlement, it added.

Revenue rose 5 per cent in the full year to a record $90.8 billion and core earnings per share increased 22 per cent to $8.60 on record deliveries.

Operating cash flow in the quarter was $5.0 billion, reflecting commercial airplane production rates, strong operating performance and timing of receipts and expenditures.

During the quarter, the company repurchased 7.8 million shares for $1 billion and paid $0.5 billion in dividends. Based on the strong cash generation and outlook, in December, the board of directors increased the share repurchase authorisation to a total of $12 billion, replacing the authorisation approved in 2013 of which approximately $4.8 billion was remaining, and raised the quarterly dividend 25 per cent.

Share repurchases are expected to be made over the next two to three years, Boeing said.

Total order backlog at quarter-end was a record $502 billion, up from $490 billion at the beginning of the quarter, and included net orders for the quarter of $37 billion. Backlog is up $61 billion from prior year-end, reflecting $152 billion of net orders in 2014.

Commercial airplanes fourth-quarter revenue increased 15 per cent to a record $16.8 billion on higher delivery volume and mix.

Fourth-quarter operating margin was 9.3 per cent, reflecting higher planned period costs and the dilutive impact of 787 deliveries partially offset by the delivery volume, Boeing said.

During the quarter, the company began production on the fuselage stringers of the first 737 MAX airplane. The 737 programme has won over 2,600 firm orders for the 737 MAX since launch, it said.

Also, during the quarter, the company began final assembly of the 787-9 Dreamliner at the South Carolina facility and broke ground on the 777X composite centers in Everett and St Louis.

Commercial Airplanes booked 432 net orders during the quarter with a record 1,432 orders in 2014. Backlog remains strong with nearly 5,800 airplanes valued at a record $440 billion.

Defence, Space & Security's fourth-quarter revenue was $7.6 billion with an operating margin of 12.1 per cent.

Boeing Military Aircraft (BMA) fourth-quarter revenue was $3.0 billion, reflecting lower planned F-15 and C-17 deliveries. Operating margin increased to 12.3 per cent, reflecting strong operating performance. During the quarter, BMA completed the first flight of the 767-2C test aircraft for the KC-46 tanker programme and Congress approved funding for 15 EA-18G Growlers.

Network & Space Systems (N&SS) fourth-quarter revenue was $2.2 billion, reflecting lower government satellite volume, and operating margin was 8.8 per cent. During the quarter, N&SS completed the first two all-electric propulsion 702SP satellites.

Global Services & Support (GS&S) fourth-quarter revenue increased to $2.4 billion on higher volume in maintenance, modification and upgrades (MM&U). Operating margin increased to 14.9 per cent reflecting strong operating performance across the segment and mix within MM&U. During the quarter, GS&S was awarded a 25-year order from the Australian government to train navy and army rotary wing aircrew.

Fourth-quarter 2014 results include the full year 2014 US research and development tax credit of $188 million.

Boeing said its core operating earnings could dip in 2015, to $8.20 to $8.40 a share, from $8.60 in 2014, when Boeing received tax settlements worth 71 cents a share.