Boeing’s second-quarter Defense revenue
The Defense, Space & Security segment is the second-largest contributor to Boeing’s (BA) revenue. In the second quarter, the segment’s share accounted for 23.1% of the company’s total revenue compared to 22.3% in the second quarter of 2017.
The Defense segment’s revenue was $5.5 billion in the second quarter, up 8.8% from $5.1 billion in the second quarter of 2017. Its revenue growth was driven by higher volumes of the F/A-18 aircraft and increased weapon volumes.
Segment’s second-quarter orders and backlog
In the second quarter, Boeing’s Defense, Space & Security segment concluded a production contract for 28 F/A-18 Super Hornets for Kuwait. Apart from this, the segment garnered contracts for 18 additional F/A-18 Super Hornets and three P-8 Poseidon aircraft for the US Navy. The segment received a multiyear contract for 58 V-22 Osprey aircraft.
In the second quarter, the Defense segment inducted the first F/A-18 aircraft into the Service Life Modification program. It also carried out two successful tests for the US Air Force’s Minuteman-III in the quarter. On the commercial satellites front, Boeing completed an O3b mPOWER preliminary design review with the Luxembourg-based SES.
The Defense segment received orders worth $7.0 billion in the second quarter. Total backlog for the Defense segment was $52 billion in the period, 35% of which was reflective of international clients’ orders.
Defense segment outlook
Boeing anticipates strong growth in the Defense, Space & Security segment in 2018. Major international fighter awards and higher weapon sales should drive the segment’s revenue growth in 2018. As a result, the industrial giant has raised its 2018 revenue guidance for the segment by $500.0 million to the $22.0 billion–$23.0 billion range.
A look at DIA
Those bullish on the prospects of aerospace and defense (RTN) companies’ stocks may want to consider investing in the SPDR Dow Jones Industrial Average ETF (DIA). The ETF holds 13.2% in major aerospace (NOC) and defense (LMT) companies. It holds 9.56% in Boeing.
In the next article, we’ll discuss Boeing’s Global Services segment’s second-quarter results.