Boeing Reported First-Quarter Profit Down 9 Percent due to a $156 million charge for the KC-46 program, and a $70 million pretax charge for its 747 program. The U.S. Air Force aerial refueling tanker program is over-budget and behind schedule, while the weak air cargo market has slowed sales of the jumbo jet freighter. Earnings fell to $1.22 billion, from $1.34 billion a year earlier, but first-quarter revenue increased 2 percent to $22.6 billion.

Boeing still forecasts that its full-year profit and revenue will match 2015 and it is confident that other parts of its business would make up for the added expenses. The defense business was better than last year’s first quarter. Chief Executive Officer Dennis Muilenburg said, “Higher year-over-year deliveries of military aircraft and continued solid operating performance on core production programs drove revenue growth and strong cash flow for Boeing in the first quarter.”

Boeing did not report a 787 charge and said the program’s deferred costs rose by only $141 million to $28.65 billion, less than prior quarterly increases, but still the hole deepens. Commercial Airplanes first-quarter revenue decreased to $14.399 billion on 4 percent lower delivery volume of 176 aircraft. First-quarter operating margin was 7.2 percent. In the previous year, revenue was $15.381 billion, and the operating margin was $10.5 percent. 

Earnings from commercial operations fell 36 percent to $1.033 billion from last year’s $1.617 billion. Commercial Airplanes booked 121 net orders during the quarter. Backlog remains strong with over 5,700 airplanes valued at $424 billion. In the first quarter of 2015, Boeing sold 116 aircraft, so sales this year are still strong, but some of those new sales were order changes to different types, which allowed at least one customer to delay delivery. In January, Mr. Muilenburg said Boeing will build between 740 and 745 commercial jets this year, down 20 from the 762 delivered in 2015, and the high-value 747 and 777 wide-bodies will be most affected. Expected revenue and cash flow for the year will drop accordingly. Boeing will build several flight test 737 MAXs this year, as well as the first production versions that cannot be delivered to customers until certification in 2017.

Subscriber Log In

Breaking News - From Avmark Newsletter

Our Publications

The AVMARK Newsletter 

Published since 1962, the AVMARK Newsletter reports all orders, purchase sales and leases of new and used transport aircraft. The Newsletter analyzes regulatory, economic and operational factors affecting the market for and value of transport aircraft. 

Transport aircraft values 

Reports current fair market values by year of build and project the future value of all transport category aircraft. The future values are based on an economic model which projects the values based on the earning stream of approximately 130 different types of aircraft for their useful life. 

Historic Jet & Turboprop Values and Lease Rates 

Historic Jet and Turboprop Values is a summary of the then current fair market values as published in the Avmark Newsletter for all jets and turboprops in service. The prices are based on reported transactions and on AVMARK's experience in consulting, appraisal and fleet evaluation. 

Small Transport Aircraft (Regional Jet & Turboprop) 

STA is designed as an easy to use reference guide to compare the operating and cost parameters of 35 regional jet and turboprop aircraft. Information includes development history, current production status, configuration and operating performance and costs as reported to the DOT. 

Cron Job Starts