"We delivered a solid first quarter and are focused on driving stability for our customers," said Dave Calhoun, Boeing president and chief executive officer. "We are progressing through recent supply chain disruptions but remain confident in the goals we set for this year, as well as for the longer term. Demand is strong across our key markets and we are growing investments to advance our development programs and innovate strategic capabilities for our customers and for our future."
Commercial Aeroplanes' first-quarter revenue increased to $6.7 billion driven by higher 737 and 787 deliveries, partially offset by 787 customer considerations (Table 4). An operating margin of (9.2) percent also reflects abnormal costs and period expenses, including research and development.
On the 737 programmes, earlier this month the program's fuselage supplier notified Boeing that a non-standard manufacturing process was used on two fittings in the aft fuselage section of certain 737 aeroplanes. This is not an immediate safety of flight issue and the in-service fleet can continue operating safely. While near-term deliveries and production will be impacted as the program performs necessary inspections and rework, the program still expects to deliver 400-450 aeroplanes this year. On production, the supplier master schedule remains unchanged including anticipated production rate increases, which will result in higher inventory levels. The company expects final assembly production to recover in the coming months with plans to increase to 38 per month later this year and 50 per month in the 2025/2026 timeframe.
The 787 program is producing at three per month with plans to ramp production to five per month in late 2023 and to 10 per month in the 2025/2026 timeframe.
During the quarter, Commercial Airplanes secured net orders of 107. Also during the quarter, the company secured commitments from Air India for 190 737 MAX, 20 787, and 10 777X airplanes and from Riyadh Air and Saudi Arabian Airlines for up to 121 787 airplanes. Commercial Airplanes delivered 130 aeroplanes during the quarter and the backlog included over 4,500 aeroplanes valued at $334 billion.
Defense, Space & Security first-quarter revenue was $6.5 billion. First-quarter operating margin of (3.2) percent primarily reflects a $245 million pre-tax charge on the KC-46A Tanker program largely driven by the previously shared supplier quality issue resulting in factory disruption and rework. Results also include the continued operational impact of labor instability and supply chain disruption on other programs.
During the quarter, Defense, Space & Security captured awards from the U.S. Army for 184 Apaches and from the U.S. Air Force for 15 KC-46A Tankers and the initial E-7 development contract. Backlog at Defense, Space & Security was $58 billion, of which 30 percent represents orders from customers outside the U.S.
Global Services first-quarter revenue of $4.7 billion and operating margin of 17.9 percent reflect higher commercial volume and favorable mix.
During the quarter, Global Services committed to set up the first Boeing Converted Freighter line in India in collaboration with GMR Aero Technic, delivered AerCap's 50th 737-800 Boeing Converted Freighter and broke ground on a new component operations facility in Jacksonville, Florida.
Table 1. Summary Financial Results | First Quarter | |||||||||||||||||||
(Dollars in Millions, except per share data) | 2023 | 2022 | Change | |||||||||||||||||
Revenues | $17,921 | $13,991 | 28 % | |||||||||||||||||
GAAP | ||||||||||||||||||||
Loss From Operations | ($149) | ($1,162) | NM | |||||||||||||||||
Operating Margin | (0.8) | % | (8.3) | % | NM | |||||||||||||||
Net Loss | ($425) | ($1,242) | NM | |||||||||||||||||
Loss Per Share | ($0.69) | ($2.06) | NM | |||||||||||||||||
Operating Cash Flow | ($318) | ($3,216) | NM | |||||||||||||||||
Non-GAAP* | ||||||||||||||||||||
Core Operating Loss | ($440) | ($1,445) | NM | |||||||||||||||||
Core Operating Margin | (2.5) | % | (10.3) | % | NM | |||||||||||||||
Core Loss Per Share | ($1.27) | ($2.75) | NM | |||||||||||||||||
*Non-GAAP measure; complete definitions of Boeing's non-GAAP measures are on page 5, "Non-GAAP Measures Disclosures." |