Friday, February 1, 2013

International Orders Boost Boeing Defense

Defense aircraft orders from international customers have grown to 41% of Boeing’s total backlog and account for 24% of Boeing Defense, Space & Security’s current backlog, the company reported in a 2012 earnings call Jan. 30.

Defense revenues were up 2% to $32.6 billion — compared to $49.1 billion for commercial aircraft — largely on the strength of a 10% growth at Boeing Military Aircraft. There, production rates on AH-64D Apache and CH-47 Chinook helicopters have climbed, production started on the KC-46 tanker program and the company made its first delivery of P-8I maritime patrol aircraft to India.

Lower earnings on the Ground-based Midcourse Defense program and “several” satellite programs contributed to a 12% drop in 2012 revenues for BDS’ Network & Space Systems unit. BDS revenues of $7.5 billion contributed $3 billion to earnings from operations, down 3% from 2011.

Similarly, declines in integrated logistics weakened Global Services & Support revenues, which were up a modest 3% to $8.6 billion. But an Integrated Sustainment Program from the U.S. Air Force for the C-17 transport and a contract to upgrade 68 F-15s for an unnamed international customer will help this year’s revenues.

International sales are increasingly offsetting weak U.S. defense spending at Boeing. Chief Financial Officer Greg Smith says international customers now account for 24% of BDS revenues. Boeing is to deliver three more P-8Is to India and five C-17s, including one last week.

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