Boeing, the American aerospace company, has reported its first-quarter results for the Defense, Space, & Security industry (DSS). The company reported a revenue of $6.5bn, while the operating margin was recorded at 3.2%.
The operating margin primarily reflects a $245m pre-tax charge on the KC-46A Tanker program. The supplier quality issue had resulted in factory disruption and re-work, which drove the charge. The results also include the continued operational impact of labour instability and supply chain disruption on other programs.
During the first quarter, Boeing’s DSS business captured awards from the US Army for 184 Apaches and the US Air Force for 15 KC-46A Tankers and the initial E-7 development contract.
The business has a backlog of $58bn, out of which 30% represents orders from customers outside the US. The company’s ability to secure customer orders worldwide reflects the global demand for Boeing’s products and services.
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Some examples in Q1 include the New Zealand MoD accepting the second delivery of their Poseidon Aircraft to support New Zealand’s aerial surveillance missions. Boeing also consolidated pre-existing ties with Kuwait with a F/A-18 $70m logistics contract.
“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.”
Boeing will focus on improving its operations and addressing the issues its programs face in the hope of weathering the supply chain and labour challenges storm, emerging more robust for it.
The DSS business reported mixed results for the first quarter of 2023. While the revenue was $6.5bn, the supplier quality issue and labour instability impacted the operating margin.
Nevertheless, Boeing has reasons for optimism about the future as the company continues delivering products and services to its military and commercial customers.
Boeing delivered 39 major platforms across its various programmes in Q1 this year, including helicopters, fighter jets, tankers, and satellites.