Boeing Beats Q4 Earnings Estimates, Profit Plunges Y/Y

Aerospace giant The Boeing Company (BA – Analyst Report) delivered fourth-quarter 2015 adjusted earnings of $1.60 per share, confidently beating the Zacks Consensus Estimate of $1.25 by 28%. Earnings, however, plunged 30.7% from $2.31 per share a year ago, owing to the previously announced $569 million after-tax charge (84 cents per share) on the 747 program due to production cuts given the slow recovery in the air cargo market.

On a GAAP basis, Boeing reported a profit of $1.51 per share, down 25% from $2.02 per share in the year-ago quarter.

2015 non-GAAP earnings were $7.72 per share, surpassing the Zacks Consensus Estimate of $7.35 but decreasing 10% year over year. On a GAAP basis, earnings were $7.44 per share, up 1% year over year.

Revenues

The company’s revenues dropped 4% year over year to $23.57 billion in the reported quarter. The reported figure was however ahead of the Zacks Consensus Estimate of $23.39 billion.

Revenues were $96.11 billion in 2015, up 6% year over year and ahead of the Street expectation of $95.90 billion.
 
Total Backlog

Backlog at the end of the fourth quarter declined to $489.3 billion from $502.3 billion at 2014 end. Reported backlog included $83 billion of net orders during the year.

Quarterly Segment Results

Commercial Airplane Segment: The segment saw a 4% decline in revenues to $16.09 billion on lower delivery volume. Operating margin contracted 580 basis points (bps) year over year to 3.5%. Margins reflected stepped-up R&D and the previously announced $885 million pre-tax charge on the 747 program.

In the fourth quarter, Boeing delivered 182 commercial airplanes compared with 195 a year ago. During the quarter, the Next Generation 737 model proved its popularity yet again, delivering 120 airplanes, followed by its 787 model with 34 deliveries. In the year-earlier period, the company had delivered 126 units of the 737 and 35 units of the 787 model. Boeing delivered 21 units of 777 in fourth-quarter 2015 as against 24 units in the year-ago period.

During 2015, Boeing produced a record breaking 495 single-aisle 737s, up from the 485 it produced in 2014. It delivered its 787 at a rate of nearly 11.25 per month in 2015, up from about 9.5 a month in 2014 and also higher than the company’s goal of 10 monthly deliveries. Notably, Boeing booked more 737 orders than it produced, with 563 orders booked by the end of Dec 2015.