Boeing Defense, Space & Security 3Q Revenue at $5.7 Billion

Boeing’s Defense, Space & Security business’s third-quarter 2018 revenue increased to $5.7 billion, up from $5,050 for the same period last year; driven by increased volume across government satellites, KC-46 Tanker, F/A-18 and weapons.

Third-quarter operating margin was (4.3) percent, primarily reflecting $691 million of charges related to planned investments in the T-X and MQ-25 programs and $64 million related to cost growth on the KC-46 Tanker program, a Boeing release said Wednesday.

During the quarter, Defense, Space & Security won key franchise program awards, including the T-X Trainer and MH-139 helicopter for the U.S. Air Force, the MQ-25 unmanned aircraft for the U.S. Navy, and the fourth KC-46 Tanker production lot. The total value these contracts is about $12 billion.

Significant milestones during the quarter included first flights of the Apache and Chinook helicopters for the Indian Air Force and receipt of Supplemental Type Certification for the KC-46 Tanker program, signifying completion of FAA certification. We also completed the acquisition of Millennium Space Systems, which will provide customers with advanced small-satellite technologies and flexible solutions.

Backlog at Defense, Space & Security was $58 billion, of which 31 percent represents orders from customers outside the U.S. Defense, Space & Security revenue guidance increased to between $22.5 and $23.0 billion from between $22.0 and $23.0 billion driven by higher volume and margin guidance is adjusted to greater than 6.5% from between 10% and 10.5% primarily to account for the investments in the business.