U.S. aerospace behemoth Boeing (BA, Financial) reported robust fourth-quarter earnings, comprehensively surpassing earnings and revenue estimates. Having ended the year on a high note, the plane maker promises to deliver more aircraft this year than 2017.
Boeing’s CEO was pleased with the company’s performance as he commented:
"Our teams delivered a record year of financial and operational performance as they focused on disciplined execution of production and development programs, growing services, and delivering value to customers," He further said: "That performance enables increased investments in our people and our business, and greater cash return to shareholders.”
Diving into the numbers
The company saw fourth-quarter net income double to $3.13 billion or $5.18 per share, up from $1.63 billion or $2.59 per share reported in the year-ago quarter. Boeing’s earnings per share (EPS) came in at $3.06, which was 17 cents more than what was forecasted. As a matter of fact, fourth-quarter revenue was $25.37 billion, beating expectations of $24.69 billion. For 2017, the company registered revenue of $93.39 billion while posting an adjusted EPS of $12.04 a share.
Boeing’s operating cash flow stood at $2.9 billion, up 3.5% from fourth-quarter of 2016. Operating cash flow for the full year came in at $13.34 billion. At the end of the year, Boeing’s unfulfilled orders came in at $488.1 billion, up from $473.5 billion from 2016. For 2017, however, company’s backlog was worth $40 billion of net orders.
At the end of 2017, the company had cash and cash equivalents of $8.81 billion while short-term and other investments stood at $1.18 billion. Long-term debt came in at $9.78 billion, up 2.2% from the same period last year. Free cash flow for the year was $11.61 billion while the same was $7.89 billion at the end of 2016.
Segment details
In the commercial airplane segment, the company saw 8% quarterly revenue growth, which translates to $15.47 billion. Operating margin for the quarter was 11.5% on a year-over-year basis. The commercial airplanes booked 912 orders, which brought its backlog to 5,864. As for this quarter, the company booked 414 net orders (after adjustments).
Company’s Defense, Space and Security segment witnessed 5% quarterly revenue growth to $5.54 billion, which was powered by higher weapons delivery. The operating margin was 10%. At the end of the year, the company had orders worth $50 billion, 40% of which comprised orders from international clients.
Revenue at the Global Services was $4 billion during the quarter, up 17% from the same period last year. Operating margin jumped to 15.4% on a year-over-year basis. At the end of the year, the segment had orders booked worth $6 billion.
Guidance
Boeing also issued 2018 guidance stating that EPS is expected to lie from $13.80 to $14 per share. Furthermore, the company sees revenue of $96 billion to $98 billion. Operating cash flow is estimated to stand at $15 billion this year, up from $13.3 billion in last year. Capital expenditure for the year is estimated to be roughly $2.2 billion.
As a matter of fact, the aerospace giant projects commercial deliveries of 810 to 815, up from 763 in 2017. In commercial deliveries segment, the company projects revenue of $59.5 billion to $60.5 billion. The company also provided full-year revenue guidance in Defense, Space and Security segment as well as Global service segment. In the former, company estimates revenue of $21.5 to $22.5 billion while in the latter, company anticipates the same to lie between $15 billion to $15.5 billion.
(Disclosure: I do not hold any position in the stock mentioned in this article.)
