Boeing reports record 2014 revenue
Fourth-quarter 2014 core operating earnings (non-GAAP) increased to $2.3 billion and GAAP earnings from operations increased to $2.0 billion. Fourth-quarter 2013 results included a $406 million non-cash charge ($0.34 per share) related to the A-12 settlement.
Revenue rose 5% in the full year to a record $90.8 billion and core earnings per share (non-GAAP) increased 22% to $8.60 on record deliveries. Full-year 2014 GAAP earnings per share was $7.38.
Core earnings per share guidance for 2015 is set at between $8.20 and $8.40, while GAAP earnings per share guidance is established at between $8.10 and $8.30. Revenue guidance is between $94.5 and $96.5 billion, including commercial deliveries of between 750 and 755. Operating cash flow is expected to be greater than $9.0 billion.
"Strong operating performance in the final quarter of 2014 propelled us to some of our best-ever results and sealed a fifth consecutive year of core operating earnings growth. By responding to strong demand with market-leading and proven products and capabilities, and delivering them more efficiently, we are strengthening a powerful business platform that is providing increased returns for our shareholders," said Boeing Chairman and Chief Executive Officer Jim McNerney.
"Our Commercial Airplanes business successfully increased production rates and set an industry record for annual deliveries while also growing its backlog to new highs on record new orders for the year. Our Defense, Space & Security team navigated a challenging market environment to achieve solid revenue and healthy margins while also winning significant new contracts," said McNerney.
"For 2015, we will continue to build on our commercial airplanes market leadership, strengthening and repositioning our defence, space and security business and working to better meet the needs of our customers by focusing on improving productivity, executing to development plans and delivering our industry-leading portfolio of innovative aerospace products and services."
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%. Share repurchases are expected to be made over the next two to three years.
Boeing Commercial Airplanes fourth-quarter revenue increased 15% to a record $16.8 billion on higher delivery volume and mix. Fourth-quarter operating margin was 9.3%, reflecting higher planned period costs and the dilutive impact of 787 deliveries partially offset by the delivery volume.
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. 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 centres 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.
Boeing Defense, Space & Security's fourth-quarter revenue was $7.6 billion with an operating margin of 12.1%.
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%, 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%. 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% 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.
Backlog at Defense, Space & Security was $62 billion, of which 36% represents orders with international customers.
