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BOEING REPORTS SECOND-QUARTER 1992 RESULTS

 BOEING REPORTS SECOND-QUARTER 1992 RESULTS
 Six Months Ended
 June 30, 2nd Quarter
 1992 1991 1992 1991
 ($ in millions except per share data)
 Sales $15,790 $13,904 $ 7,823 $ 7,813
 Net Earnings $ 894 $ 763 $ 453 $ 454
 Earnings Per Share $ 2.62 $ 2.22 $ 1.33 $ 1.32
 Average Shares (millions) 340.987 343.753
 SEATTLE, July 27 /PRNewswire/ -- Sales of $15.8 billion and net earnings of $894 million, or $2.62 per share, for the first six months of 1992 were reported by Frank Shrontz, Boeing (NYSE: BA) chairman and chief executive officer. Comparable figures for 1991 were sales of $13.9 billion and net earnings of $763 million, or $2.22 per share.
 Sales and earnings for the second quarter of 1992 were virtually the same as in the 1991 second quarter, with sales of $7.8 billion and earnings of $453 million or $1.33 per share, compared with 1991 second quarter earnings of $454 million or $1.32 per share.
 The increase in net earnings for the first six months of 1992 compared to the same period in the prior year was primarily due to increased commercial aircraft sales and improved cost performance in all major segments. These factors were partially offset by higher research and development expenses, principally for the new 777 program, and a higher effective federal income tax rate.
 Although the 1992 second quarter net earnings were comparable to the 1991 second quarter, the current quarter included a significantly higher level of research and development expense offset by improved cost performance.
 Commercial jet transport deliveries in the second half of 1992 are projected to be below first half levels, principally for the 737 and 747 models. As previously announced, the 737 production rate will be reduced from 21 per month to 14 per month this fall. Thirty-four of the 61 747s currently scheduled for delivery this year occurred in the first six months. The reduced jet transport deliveries and continued high levels of research and development expense will result in lower sales and earnings for the second half of the year. Based on current programs and schedules, the company continues to project total 1992 revenues to be in the $29.5 billion range.
 Airline traffic on a worldwide basis continues to increase, especially compared to the severely depressed levels of early 1991. The highest growth rates have been in the Asia/Pacific and Western European regions. International carriers, which account for over 55 percent of airline traffic, reported 16-percent growth through May. This growth trend should moderate throughout the balance of the year. U.S. carriers experienced a 4.6-percent increase in traffic in the first half of 1992, but continue to incur significant losses due to low yields. According to a recent forecast by the International Civil Aviation Organization, 1992 worldwide passenger traffic (excluding Aeroflot of the former Soviet Union) is expected to grow approximately 5 percent over 1991 (or approximately 1 percent over 1990), followed by increases of approximately 6 percent and 6.5 percent in 1993 and 1994, respectively.
 Announced orders during the second quarter totaled 55 aircraft valued at $5.0 billion. The orders included Cathay Pacific for 11 777s, Emirates (of United Arab Emirates) for 7 777s, Kuwait Airways for three 747s, Malaysian Airline System for 17 737s, Lufthansa German Airlines for two 747s, and Singapore Airlines for two 747s. Total announced orders for the first half of 1992 were valued at $9.4 billion compared to $9.8 billion for the same period of 1991. Over 85 percent of the 1992 announced order value was from non-U.S. airlines. Total new orders for 1992 are expected to result in Boeing maintaining a favorable market share.
 Design, testing, facilities construction, procurement and early production activities on the new 777 program continue to meet major milestones. Approximately 50 percent of the engineering design and planning requirements have been released to manufacturing. By the end of the quarter, Boeing pilots had successfully completed more than 230 landings and over 110 flight hours in a 757 modified to simulate the 777's flight control system. Announced orders for 106 777s plus 93 options from 9 customers have been received by the end of the second quarter.
 During May, the company delivered the final two production aircraft based on the 707 airframe, an Airborne Warning and Control System (AWACS) for the United Kingdom and an E-6 submarine communications aircraft for the U.S. Navy. Since the first commercial delivery 35 years ago, there have been a total 1,009 units delivered, 917 commercial and 92 military derivatives.
 The Department of Defense, NASA and Congress continue to review the funding levels of various programs as part of the fiscal year 1993 budget process. Funding levels for major Company programs such as the B-2 bomber, F-22 fighter, RAH-66 Comanche helicopter, V-22 tiltrotor aircraft, Update IV for P-3 aircraft avionics and Space Station Freedom are uncertain in the changing national defense and space strategy and may be subject to stretch-out, curtailment or possibly termination. However, the company's defense and space business is broadly diversified and includes a number of programs subject to system upgrade or modification.
 OTHER FINANCIAL AND OPERATING DATA
 Six Months Ended
 June 30, 2nd Quarter
 1992 1991 1992 1991
 ($ in millions)
 Sales
 Commercial $13,054 $11,503 $6,502 $6,589
 U.S. Government $ 2,340 $ 2,025 $1,064 $1,066
 Foreign Government $ 396 $ 376 $ 257 $ 158
 Other Income $ 122 $ 127 $ 62 $ 60
 R&D Expense $ 900 $ 661 $ 455 $338
 Effective Income Tax
 Rate (percents) 31.3 28.4 31.7 28.2
 Other income for the year is projected to be below the 1991 total of $263 million due to low short-term interest rates and declining cash and short-term investment balances in the second half of 1992.
 Research and development expense for the year 1992 continues to be projected in the $1.8 billion range.
 June 30, Dec. 31,
 1992 1991
 ($ in billions)
 Cash & Short-Term Investments $ 4.3 $ 3.5
 Borrowings $ 1.3 $ 1.3
 Inventories
 Gross $12.6 $13.7
 Net $ 3.1 $ 3.3
 Firm Backlog
 Commercial and Foreign Gov't $91.9 $92.8
 U.S. Government 5.1 5.1
 Total $97.0 $97.9
 For the balance of 1992, the company projects that cash requirements will substantially exceed amounts generated from operations due to lower sales volume and increased facilities, working capital and other expenditures to support commercial jet transport programs.
 Approximately 45 percent of the firm backlog for commercial jet transports is scheduled to be delivered after 1994, including all 777 aircraft. Not included in firm backlog are purchase options and announced orders for which definitive contracts have not been executed and orders from customers who have filed for bankruptcy. U.S. Government and foreign military firm backlog is limited to amounts obligated to contracts. If recognition were given to unobligated amounts, unfilled orders at June 30, 1992, would be increased by $9.3 billion.
 Jet transport deliveries:
 First Six Months Calendar Year
 1992
 1992 1991 Projection 1991
 737 125 104 218 215
 747 34 32 61 64
 757 51 42 95 80
 767 33 32 63 62
 Total Commercial 243 210 437 421
 707 Derivatives 5 4 5 14
 Total Deliveries 248 214 442 435
 Sixty-seven percent of the commercial jet transport deliveries in the first six months of 1992 went to non-U.S. customers.
 Announced orders for commercial jet transports:
 Year-to-Date
 1992 1991
 No. of Customers 20 21
 Value (Billions) $9.4 $9.8
 No. of aircraft 111 113
 By Model:
 737 44 24
 747 17 20
 757 15 21
 767 5 40
 777 30 8
 Over 85 percent of the 1992 announced order value was from non-U.S. customers.
 -0- 7/27/92
 /CONTACT: Russ Young of The Boeing Co., 206-655-6123/
 (BA) CO: The Boeing Co. ST: Washington IN: AIR ARO SU: ERN


SC -- SE004 -- 3517 07/27/92 12:18 EDT
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