Boeing 4th Quarter 2008 Earnings

Boeing Posts Quarterly Loss on Strike Impact and Charges
􀂄 Fourth-quarter revenues declined to $12.7 billion from $17.5 billion as labor
strike pushed airplane deliveries out of the quarter
􀂄 Fourth-quarter EPS declined to loss of $0.08 per share, reduced by an estimated
total of $1.79 due to strike, 747 charge and litigation-related reserve
􀂄 Backlog grew 8 percent in 2008 to a record $352 billion
􀂄 2009 EPS guidance of $5.05 to $5.35 underpins a solid foundation in challenging
times

CHICAGO, Jan. 28, 2009 – The Boeing Company’s [NYSE: BA] fourth-quarter net income declined to a loss of $56 million, or $0.08 per share, reflecting the now-settled machinists' strike (EPS impact estimated at $1.09 per share), a charge related to the 747 ($0.61 per share) and a litigation-related reserve ($0.09 per share).
Revenues for the quarter declined 27 percent to $12.7 billion, due primarily to the effects of the strike which reduced commercial airplane deliveries by approximately 70 units and revenues by an estimated $4.3 billion (Table 1).
For the full year of 2008, net income fell 34 percent to $2.7 billion, EPS was $3.71 per share, and revenue fell 8 percent to $60.9 billion. Full-year results were impacted by the strike, the 747 charge, the litigation-related reserve, and higher costs for AEW&C announced in the second quarter, which together reduced full-year EPS by an estimated $2.56 per share. This was partially offset by lower pension and deferred compensation expenses.

"The progress we made in many areas of Boeing during 2008 was outweighed by the impact of the strike and our performance on some key development programs," said Chairman, President, and Chief Executive Officer Jim McNerney. "Our imperative going forward is improving execution where it needs to be improved, maintaining strong performance across all our production programs, and preserving our financial strength to grow in these challenging economic times."
Fourth-quarter operating cash outflow was $1.6 billion, primarily reflecting the effects of the strike (Table 2). Operating cash outflow for the year was $0.4 billion, and free cash flow* was negative $2.1 billion. Total company backlog at year-end was a record $352 billion, up 8 percent in 2008 driven by commercial airplane orders and new IDS contract awards.