April 26, 2017: Boeing today reported first quarter revenues that were lower in the year earlier period in part because of fewer commercial airplane deliveries, but the operating margin and net earnings were higher.
There were fewer 737 deliveries as Boeing transitions from the 737NG to the 737 MAX. First deliveries of the MAX are due this quarter.
Likewise, Boeing is beginning a transition to a third family member of the 787. The first 787-10 rolled off the production line this month, beginning flight testing. The first delivery is scheduled for next year.
Revenue was down 7% YOY, to $21bn. Operating margin was up 1.7 points to 9.6%.
Boeing increased its full year guidance by 10 cents, upping the earnings per share to $9.20-$9.40.
Absent from the earnings press release was any information about revenue and profit from Boeing Global Services from Boeing Commercial Airplanes, except for an oblique reference that revenue grew, offset by fewer 737 deliveries.
Boeing revealed BGS revenue for the Defense unit of $2.3bn, down 9% from $2.6bn, reflecting a earnings decline to $318m vs $340m.
With Boeing’s emphasis of future BGS revenue targets of $50bn and how services is going to become a key part of future profits, the absence of transparency of total Services revenue and profit gripes some analysts.