Chicago. 05 February 2019. The Boeing Company recently reported fourth-quarter revenue of $28.3 billion, GAAP earnings per share of $5.93 and core earnings per share (non-GAAP)* of $5.48, all company records.

Fourth Quarter 2018

  • Record revenue of $28.3 billion and record operating profit of $4.2 billion driven by higher volume
  • Record GAAP EPS of $5.93 and record core EPS (non-GAAP)* of $5.48 on strong performance

Full-Year 2018

  • Record revenue of $101.1 billion reflecting strong growth across the portfolio
  • Record GAAP EPS of $17.85 and record core EPS (non-GAAP)* of $16.01 driven by solid execution
  • Record operating cash flow of $15.3 billion; repurchased 26.1 million shares for $9.0 billion
  • Total backlog remains robust at $490 billion, including nearly 5,900 commercial airplanes
  • Cash and marketable securities of $8.6 billion provide strong liquidity

Outlook for 2019

  • Revenue guidance of between $109.5 and $111.5 billion reflects higher volume across all businesses
  • GAAP EPS of between $21.90 and $22.10; core EPS (non-GAAP)* of between $19.90 and $20.10
  • Operating cash flow expected to increase to between $17.0 and $17.5 billion
Table 1. Summary Financial ResultsFourth QuarterFull Year
(Dollars in Millions, except per share data)20182017Change20182017Change
Earnings From Operations$4,175$2,97840%$11,987$10,34416%
Operating Margin14.7%12.0%2.7 Pts11.9%11.0%0.9 Pts
Net Earnings$3,424$3,3203%$10,460$8,45824%
Earnings Per Share$5.93$5.498%$17.85$13.8529%
Operating Cash Flow$2,947$2,9032%$15,322$13,34615%
Core Operating Earnings$3,867$2,58949%$10,660$8,90620%
Core Operating Margin13.6%10.5%3.1 Pts10.5%9.5%1.0 Pts
Core Earnings Per Share$5.48$5.078%$16.01$12.3330%
*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.”

These results reflect record commercial deliveries, higher defense and services volume and strong performance which outweighed favorable tax impacts recorded in the fourth quarter of 2017 (Table 1). Boeing generated operating cash flow of $2.9 billion, repurchased 1.6 million shares for $0.6 billion, paid $1.0 billion of dividends and completed the acquisition of KLX.

Revenue was a record $101.1 billion for the full year reflecting higher commercial deliveries and increased volume across the company. Records for GAAP earnings per share of $17.85 and core earnings per share (non-GAAP)* of $16.01 were driven by higher volume, improved mix and solid execution.

“Across the enterprise our team delivered strong core operating performance and customer focus, driving record revenues, earnings and cash flow and further extending our global aerospace industry leadership in 2018,” said Boeing Chairman, President and Chief Executive Officer Dennis Muilenburg. “Our financial performance provided a firm platform to further invest in new growth businesses, innovation and future franchise programs, as well as in our people and enabling technologies. In the last 5 years, we have invested nearly $35 billion in key strategic areas of our business, all while increasing cash returns to shareholders.”

“Our One Boeing focus, clear strategies for growth, and leading positions in large and growing markets, give us confidence for continued strong performance, revenue expansion and solid execution across all three businesses, which is reflected in our 2019 guidance.”

“We remain focused on executing on our production and development programs as well as our growth strategy while driving further productivity, quality and safety improvements, investing in our team and creating more value and opportunity for our customers, shareholders and employees.”

Table 2. Cash FlowFourth QuarterFull Year
Operating Cash Flow$2,947$2,903$15,322$13,346
Less Additions to Property, Plant & Equipment($495)($435)($1,722)($1,739)
Free Cash Flow*$2,452$2,468$13,600$11,607
*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.”

Operating cash flow was $2.9 billion in the quarter and $15.3 billion for the full year, reflecting planned higher commercial airplane production rates and strong operating performance as well as timing of receipts and expenditures (Table 2). During the quarter, the company repurchased 1.6 million shares for $0.6 billion, paid $1.0 billion in dividends, and completed the acquisition of KLX. For the full year, the company repurchased 26.1 million shares for $9.0 billion and paid $3.9 billion in dividends. Based on strong cash generation and confidence in the company’s outlook, the board of directors in December increased the quarterly dividend per share by 20 percent and replaced the existing share repurchase program with a new $20 billion authorization.

Table 3. Cash, Marketable Securities and Debt BalancesQuarter-End
(Billions)Q4 18Q3 18
Marketable Securities1$0.9$2.0
Debt Balances:
The Boeing Company, net of intercompany loans to BCC$11.3$9.4
Boeing Capital, including intercompany loans$2.5$2.5
Total Consolidated Debt$13.8$11.9
1 Marketable securities consists primarily of time deposits due within one year classified as “short-term investments.”

Cash and investments in marketable securities totaled $8.6 billion, compared to $10.0 billion at the beginning of the quarter (Table 3). Debt was $13.8 billion, up from $11.9 billion at the beginning of the quarter primarily due to the issuance of new debt following the KLX acquisition.

Total company backlog at quarter-end was relatively unchanged at $490 billion and included net orders for the quarter of $27 billion.

Segment Results

Commercial Airplanes

Table 4. Commercial AirplanesFourth QuarterFull Year
(Dollars in Millions)20182017Change20182017Change
Commercial Airplanes Deliveries23820914%8067636%
Earnings from Operations$2,704$1,78751%$7,879$5,45245%
Operating Margin15.6%11.6%4.0 Pts13.0%9.4%3.6 Pts

Commercial Airplanes fourth-quarter revenue increased to $17.3 billion reflecting higher deliveries and favorable mix (Table 4). Fourth-quarter operating margin increased to 15.6 percent, driven by higher 737 volume and strong operating performance on production programs, including higher 787 margins.

During the quarter, Commercial Airplanes delivered 238 airplanes, including the delivery of the 787th 787 Dreamliner and the first 737 MAX Boeing Business Jet. The 737 program delivered 111 MAX airplanes in the fourth quarter, including the first MAX delivery from the China Completion Center, and delivered 256 MAX airplanes in 2018. The first 777X flight test airplane completed final body join and power-on, and the program remains on track for flight testing this year and first delivery in 2020.

Commercial Airplanes booked 262 net orders during the quarter, valued at $16 billion. Backlog remains robust with nearly 5,900 airplanes valued at $412 billion.

Defense, Space & Security

Table 5. Defense, Space & SecurityFourth QuarterFull Year
(Dollars in Millions)20182017Change20182017Change
Earnings from Operations$669$54423%$1,594$2,193(27%)
Operating Margin10.9%10.3%0.6 Pts6.9%10.7%(3.8) Pts

Defense, Space & Security fourth-quarter revenue increased to $6.1 billion driven by increased volume across F/A-18, satellites, and weapons (Table 5). Fourth-quarter operating margin increased to 10.9 percent, primarily reflecting favorable mix.

During the quarter, Defense, Space & Security was awarded contracts for the second KC-46 Tanker to Japan, a joint ground system to provide tactical satellite communications for the U.S. Air Force and to modernize 17 Chinooks for Spain. Defense, Space & Security also completed a successful test for the U.S. Air Force’s Minuteman III and unveiled the SB>1 DEFIANT helicopter for the U.S. Army. In January, the first two KC-46 Tankers were delivered to the U.S. Air Force.

Backlog at Defense, Space & Security was $57 billion, of which 30 percent represents orders from customers outside the U.S.

Global Services

Table 6. Global ServicesFourth QuarterFull Year
(Dollars in Millions)20182017Change20182017Change
Earnings from Operations$732$55931%$2,522$2,24612%
Operating Margin15.0%14.7%0.3 Pts14.8%15.4%(0.6) Pts

Global Services fourth-quarter revenue increased to $4.9 billion, primarily driven by higher parts volume including the acquisition of KLX (Table 6). Fourth-quarter operating margin increased to 15.0 percent reflecting improved performance, partially offset by higher period costs.

During the quarter, Global Services was awarded Performance Based Logistics contracts for C-17 and F-22 for the U.S. Air Force and F-15 for Qatar as well as contracts for F/A-18 services for the U.S Navy. Global Services was also selected by Shenzhen Airlines to provide crew management solutions, making them the first airline in China to utilize Boeing AnalytX-powered services. Significant milestones during the quarter included the first KC-46 training flight with the U.S. Air Force. In addition, Global Services successfully began integrating KLX and began operations of the Auxiliary Power Unit joint venture with Safran.

Additional Financial Information

Table 7. Additional Financial InformationFourth QuarterFull Year
(Dollars in Millions)2018201720182017
Boeing Capital$60$73$274$307
Unallocated items, eliminations and other($30)$255($75)$542
Earnings from Operations
Boeing Capital$8$27$79$114
FAS/CAS service cost adjustment$308$389$1,327$1,438
Other unallocated items and eliminations($246)($328)($1,414)($1,099)
Other income, net$29$32$92$123
Interest and debt expense($158)($93)($475)($360)
Effective tax rate15.4%(13.8)%9.9%16.3%

At quarter-end, Boeing Capital’s net portfolio balance was $2.8 billion. Revenue in other unallocated items and eliminations decreased primarily due to the timing of eliminations for intercompany aircraft deliveries and the 2017 sale of aircraft previously leased to customers. The change in earnings from other unallocated items and eliminations is primarily due to timing of expense allocations. The effective tax rate for the fourth quarter increased from the same period in the prior year primarily due to the favorable impacts from the enactment of the Tax Cuts and Jobs Act recorded in the fourth quarter of 2017.


Effective in the first quarter of 2019, the Company is making a change to the accounting for military derivative aircraft. Revenues and costs associated with military derivative aircraft were previously reported in the Commercial Airplanes and Defense, Space & Security segments. Beginning in 2019, all revenues and costs associated with military derivative aircraft will be reported in the Defense, Space & Security segment. An additional exhibit is included on page 15 with restated 2018 results adjusted for the change in accounting for military derivative aircraft as well as the realignment of certain programs between Global Services and Defense, Space & Security. The Company has provided this comparable information in the exhibit and below to help investors understand the 2019 financial outlook (Table 8).

Table 8. 2019 Financial OutlookRestatedAs Reported
(Dollars in Billions, except per share data)20192018 Results2018 Results
The Boeing Company
Revenue$109.5 – 111.5
GAAP Earnings Per Share$21.90 – 22.10
Core Earnings Per Share*$19.90 – 20.10
Operating Cash Flow$17.0 – $17.5B
Commercial Airplanes
Deliveries 1895 – 905
Revenue$64.5 – 65.5$57.5$60.7
Operating Margin14.5% – 15.0%13.6%13.0%
Defense, Space & Security
Revenue$26.5 – 27.5$26.4$23.2
Operating Margin>11.0%6.3%6.9%
Global Services
      Revenue$18.5 – 19.0$17.1$17.0
      Operating Margin>15.0%14.9%14.8%
Boeing Capital Portfolio SizeStable
Research & Development~$4.1
Capital Expenditures~$2.3
Pension Expense 2~$0.0
Effective Tax Rate~16%
*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.”
1 Continues to include intercompany deliveries related to military derivative aircraft
2 Approximately $1.1 billion of pension expense is expected to be allocated to the business segments