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McDONNELL DOUGLAS REPORTS RESULTS

 McDONNELL DOUGLAS REPORTS RESULTS
 ST. LOUIS, July 31 /PRNewswire/ -- McDonnell Douglas (NYSE: MD)


earned $38 million or $1.00 per share in the second quarter of 1992, compared with $77 million or $2.01 per share in the second quarter of 1991. Revenues were down slightly at $4.893 billion.
 The commercial aircraft segment had $20 million in operating earnings on revenues of $2.154 billion in the quarter, compared with $53 million in operating earnings on revenues of $1.804 billion in the second quarter of 1991. Increased research and development expenditure was the primary factor contributing to the decline in earnings. The segment spent $29 million more on development in the second quarter of 1992 than in the second quarter of 1991, mostly as a result of developing and refining the concept of the MD-12, a proposed four-engine jumbo airliner.
 Despite reduced deliveries and revenues, the MD80/90 program achieved higher operating earnings in the second quarter due to improved margins. Deliveries and revenues were up in the MD-11 program, but the program still incurred a small operating loss, as it did in the second quarter of 1991. Because costs on the MD-11 have not declined as rapidly as planned, the corporation raised its cost estimate for the total program and reduced the rate at which it is reporting earnings.
 Operating earnings in the military aircraft segment were $66 million in the quarter, down from $106 million in the second quarter of 1991, with most of the decrease due to a $34 million pretax charge reflecting increased costs and higher reserves in the C-17 program. The same program had an $80 million pretax charge in this year's first quarter due to increased cost estimates. For the quarter, revenues in the military aircraft segment were down 19 percent -- to $1.742 billion -- primarily because of lower revenues in the C-17 program, reflecting the completion of the development phase of the program.
 The missiles, space and electronic systems segment had higher revenues but lower operating earnings in the second quarter, primarily as a result of an $11 million pretax write-off in a laser communications program and lower earnings from Space Station. Earnings were up in missile production programs.
 Including the two charges totaling $114 million in the C-17 program, operating earnings in the military aircraft segment for the first six months of 1992 fell by $119 million compared with the first six months of 1991. Mainly as a result of higher research and development costs, operating earnings in the commercial aircraft segment were $18 million lower in the first half of 1992 than the first half of 1991.
 Total aerospace debt on June 30, 1992, was $2.845 billion, compared with $2.940 billion on June 30, 1991, and $2.386 billion on December 31. The increase in aerospace debt during the first half was primarily due to lower bookings for commercial aircraft, higher funding requirements for the C-17, and deferred vendor payments.
 McDonnell Douglas delivered a total of 26 MD-80 twin jets and 14 MD-11 trijets in the second quarter, compared with 37 twin jets and nine trijets in the second quarter of 1991. For the first half of 1992, there were 52 twin jet deliveries and 21 trijet deliveries, compared with 68 twin jet deliveries and 15 trijet deliveries in the first half of 1991.
 The MD80/90 program booked three new firm orders in the second quarter. Four new orders for MD-11s were placed during the quarter, offset by four cancellations. These numbers do not include 20 MD-80s and another 20 MD-90s which are the subject of a recently announced sale and co-production agreement with the People's Republic of China.
 Firm backlog at June 30, 1992, was $26.438 billion, compared with $30.448 billion on December 31, 1991, and $33.151 billion on June 30, 1991. Total backlog was $37.072 billion, compared with $42.577 billion on December 31, 1991, and $48.737 billion on June 30, 1991.
 As of June 30, 1992, the MD-11 program status included 118 firm orders, 135 options and reserves, and 55 deliveries, for a total of 308 aircraft. On the same date, the MD80/90 program included 183 firm orders, 315 options and reserves, and 1,015 deliveries, for a total of 1,513 aircraft.
 Employment was 99,096 on June 30, 1992, compared with 113,146 a year earlier.
 MCDONNELL DOUGLAS CORPORATION
 CONSOLIDATED RESULTS OF OPERATIONS
 (Millions of dollars, except share data)
 Three Months Ended
 June 30
 1992 1991
 Unaudited
 STATEMENT OF EARNINGS
 Revenues $ 4,893 $ 4,962
 Costs and expenses:
 Cost of products, services
 and rentals 4,337 4,276
 General and administrative expenses 241 282
 Research and development 138 119
 Interest expense:
 Aerospace and other segments 86 100
 Financial services segment 41 58
 Total costs and expenses 4,843 4,835
 Earnings from Continuing
 Operations Before Income Taxes 50 127
 Income taxes 12 47
 Earnings from Continuing Operations 38 80
 Loss from discontinued operations,
 net of income taxes - (3)
 Net Earnings $ 38 $ 77
 Earnings (Loss) Per Share:
 Continuing operations $ 1.00 $ 2.08
 Discontinued operations - (.07)
 Total $ 1.00 $ 2.01
 Dividends Declared Per Share $ .35 $ .35
 MCDONNELL DOUGLAS CORPORATION
 CONSOLIDATED RESULTS OF OPERATIONS
 (Millions of dollars, except share data)
 Six Months Ended
 June 30
 1992 1991
 Unaudited
 STATEMENT OF EARNINGS
 Revenues $ 9,040 $ 9,204
 Costs and expenses:
 Cost of products, services
 and rentals 7,920 7,846
 General and administrative expenses 480 581
 Research and development 277 228
 Interest expense:
 Aerospace and other segments 163 205
 Financial services segment 86 119
 Total costs and expenses 8,926 8,979
 Earnings from Continuing
 Operations Before Income Taxes 114 225
 Income taxes 24 87
 Earnings from Continuing Operations 90 138
 Loss from discontinued operations,
 net of income taxes - (3)
 Net Earnings $ 90 $ 135
 Earnings (Loss) Per Share:
 Continuing operations $ 2.34 $ 3.58
 Discontinued operations - (.07)
 Total $ 2.34 $ 3.51
 Dividends Declared Per Share $ .70 $ .70
 Certain prior year amounts have been restated to reflect the discontinuance of certain information systems operations during the third quarter of 1991.
 MCDONNELL DOUGLAS CORPORATION
 BUSINESS SEGMENT DATA
 (Millions of dollars)
 Three Months Ended
 June 30
 1992 1991
 Unaudited
 BUSINESS SEGMENT DATA
 Revenues
 Military aircraft $ 1,742 $ 2,145
 Commercial aircraft 2,154 1,804
 Missiles, space and electronic systems 820 788
 Financial services 77 118
 Other 96 100
 Operating revenues 4,889 4,955
 Non-operating income 4 7
 Total Revenues $ 4,893 $ 4,962
 Earnings
 Military aircraft $ 66 $ 106
 Commercial aircraft 20 53
 Missiles, space and electronic systems 48 59
 Financial services 1 4
 Other 10 10
 Operating earnings from
 continuing operations 145 232
 Discontinued operations, net of
 income taxes - (3)
 Corporate and other (9) (5)
 Interest expense (86) (100)
 Income taxes (12) (47)
 Net Earnings $ 38 $ 77
 MCDONNELL DOUGLAS CORPORATION
 BUSINESS SEGMENT DATA
 (Millions of dollars)
 Six Months Ended
 June 30
 1992 1991
 Unaudited
 BUSINESS SEGMENT DATA
 Revenues
 Military aircraft $ 3,556 $ 3,937
 Commercial aircraft 3,603 3,206
 Missiles, space and electronic systems 1,519 1,582
 Financial services 162 252
 Other 193 215
 Operating revenues 9,033 9,192
 Non-operating income 7 12
 Total Revenues $ 9,040 $ 9,204
 Earnings
 Military aircraft $ 107 $ 226
 Commercial aircraft 63 81
 Missiles, space and electronic systems 102 99
 Financial services 3 15
 Other 14 17
 Operating earnings from
 continuing operations 289 438
 Discontinued operations, net of
 income taxes - (3)
 Corporate and other (12) (8)
 Interest expense (163) (205)
 Income taxes (24) (87)
 Net Earnings $ 90 $ 135
 The captions "military aircraft" and "commercial aircraft" were shown as "combat aircraft" and "transport aircraft" in prior years. "Military aircraft" now includes the old "combat aircraft" segment plus the C-17 program and other minor military programs previously included in the "transport aircraft" segment.
 Operating earnings of the financial services segment have been reduced by interest expense, an operating expense of that segment.
 Certain prior year amounts have been restated to reflect the discontinuance of certain information systems operations during the third quarter of 1991.
 MCDONNELL DOUGLAS CORPORATION
 CONSOLIDATED BALANCE SHEET
 (Millions of dollars)
 June 30 December 31
 1992 1991
 Unaudited
 ASSETS
 Cash and cash equivalents $ 78 $ 229
 Accounts receivable 784 780
 Finance receivables and property
 on lease 2,392 2,621
 Contracts in process and inventories 7,378 7,291
 Property, plant and equipment 2,345 2,414
 Other assets 1,527 1,506
 TOTAL ASSETS $ 14,504 $ 14,841
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Liabilities:
 Accounts payable and accrued
 expenses $ 3,178 $ 3,327
 Income taxes 1,156 1,273
 Advances and billings in excess of
 related costs 1,705 2,087
 Notes payable and long-term debt:
 Aerospace and other segments 2,845 2,386
 Financial services segment 1,651 1,891
 ------- -------
 10,535 10,964
 Shareholders' Equity 3,969 3,877
 TOTAL LIABILITIES AND
 SHAREHOLDERS' EQUITY $ 14,504 $ 14,841
 CAPITAL STRUCTURE
 (Millions of dollars)
 June 30, 1992
 Unaudited
 Aerospace Financial
 and Services
 Other Segments Segment Total
 Debt $ 2,845 $ 1,651 $ 4,496
 Equity 3,668 301 3,969
 ------- ------- -------
 $ 6,513 $ 1,952 $ 8,465
 Debt-to-equity ratio .78 5.49
 December 31, 1991
 Aerospace Financial
 and Services
 Other Segments Segment Total
 Debt $ 2,386 $ 1,891 $ 4,277
 Equity 3,517 360 3,877
 ------- ------- -------
 $ 5,903 $ 2,251 $ 8,154
 Debt-to-equity ratio .68 5.25
 The following is an employee message from John McDonnell, chairman and chief executive officer of McDonnell Douglas, regarding the corporation's second quarter earnings that were announced today.
 OUR SECOND QUARTER RESULTS
 To All Teammates: July 31, 1992
 Today we announced our second quarter results. We had net
 earnings of just $38 million Q down from $77 million in last
 year's second quarter. Earnings were down in all three aerospace
 segments.
 Our commercial aircraft business had $20 million in operating
 earnings on $2.154 billion in revenues Q less than a penny per
 dollar of sales. The MD80/90 line did well in continuing to
 boost margins and profitability in the face of a declining
 production level. The principal factor contributing to reduced
 earnings was an increase in research and development
 expenditures, primarily associated with the MD-12. In addition,
 beginning this quarter we are reporting an increase in MD-11
 production expenses, because costs on this program have not
 declined as rapidly as planned.
 Our military aircraft business had $66 million in operating
 earnings in the quarter on $1.742 billion in revenues. The
 decrease in earnings from 1991's second quarter was almost
 entirely due to a $34 million pretax charge in the C-17 program,
 reflecting increased costs and higher reserves.
 Our missiles, space and electronic systems business had $48
 million in operating earnings on $820 million in revenues. There
 were increased earnings from missile production programs, but
 that was more than offset by an $11 million write-off in a laser
 communications program and by reduced earnings from Space
 Station.
 We had some extremely good news recently. First, we beat out
 Boeing to win the so-called "Trunkliner" contract in the People's
 Republic of China. That represents a large new order, and it
 underscores our position as a major presence in the fastest-
 growing region in the world. Second, we have reason to cheer as
 a result of strong support the Congress and the Department of
 Defense have shown for the F/A-18 E and F upgrade, which will
 make the Hornet the centerpiece of naval aviation well into the
 next century.
 Winning new business against tough competition is one of the
 keys to success in a depressed market. But another is performing
 extremely well on existing business to the mutual satisfaction of
 customers and shareholders. In the months ahead, we will be
 taking further steps to improve our competitiveness.
 John F. McDonnell
 Chairman and Chief Executive Officer
 -0- 7/31/92 R
 /CONTACT: Andrew Wilson of McDonnell Douglas Corporation, 314-233-1038/
 (MD) CO: McDonnell Douglas ST: Missouri IN: ARO SU: ERN


CH -- LA007 -- 5551 07/31/92 11:19 EDT
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