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McDONNELL DOUGLAS REPORTS EARNINGS

 McDONNELL DOUGLAS REPORTS EARNINGS
 ST. LOUIS, April 22 /PRNewswire/ -- McDonnell Douglas (NYSE: MD) had


improved financial performance across most aerospace programs in the first quarter despite declining defense spending and softness in the commercial aircraft market.
 Compared with the first quarter of 1991, there was a $15 million increase in operating earnings in the commercial aircraft segment and a $14 million increase in the missiles, space and electronic systems segment -- to $43 million and $54 million, respectively, in this year's first quarter. There was a $79 million drop in operating earnings in the military aircraft segment -- to $41 million -- as a result of an $80 million pretax loss provision (or $1.29 per share after-tax) due to increased cost estimates in the C-17 program.
 Including the charge in the C-17 program, net earnings for the corporation as a whole were down 10 percent, to $52 million or $1.34 per share. Excluding the charge, earnings would have been up 74 percent.
 In addition to improved results from most aircraft programs, financial performance for the quarter benefited from a $28 million reduction in aerospace interest expense, compared with 1991's first quarter, and included $17 million of pension income resulting from changes in actuarial assumptions. Interest expense fell because of lower indebtedness and lower interest rates compared with 1991's first quarter.
 With the quarterly results announced today, McDonnell Douglas has adopted new business segment groupings and captions for financial reporting purposes. Results for the C-17 military transport are now included with all combat aircraft programs and all helicopter programs under the caption "military aircraft." Except for the C-17 and other minor military programs at Douglas Aircraft Co., the "commercial aircraft" segment includes programs that had been reported under the "transport aircraft" caption in prior years.
 McDonnell Douglas delivered a total of 26 MD-80 twin jets and seven MD-11 trijets in the quarter, compared with 31 twin jets and six trijets in the first quarter of 1991. While revenues were flat, operating earnings in the commercial aircraft segment increased due to improved margins in the twin jet program, lower development costs in the trijet program, and advance payments forfeited by a leasing company.
 The MD80/90 program booked one new firm order during the quarter, while losing four firm orders due to cancellations by a financially troubled leasing company. The MD-11 program booked one new firm order in another soft quarter for the commercial aircraft market.
 Despite a 12 percent drop in revenues, the missiles, space and electronic systems segment had increased earnings due to improved results in several programs, including space station and the Tomahawk cruise missile.
 Apart from the C-17, all of the corporation's principal military aircraft programs, including the F/A-18, F-15, AV-8B, and AH-64 Apache, were profitable.
 The $80 million pretax loss provision in the C-17 program was caused by estimated cost growth in the portion of the program which includes research, development and the first six production aircraft. This portion of the program is now over 90 percent complete. Since the second quarter of 1991, McDonnell Douglas, for purposes of earnings recognition, has combined C-17 contracts for development and production of the first 10 aircraft. Losses in development and production of the first six aircraft have been partially offset by performance on the four follow-on production aircraft.
 Total aerospace debt on March 31, 1992, was $2.571 billion, compared with $3.305 billion on March 31, 1991, and with $2.386 billion on December 31, 1991. The increase in aerospace debt during the first quarter was primarily due to reduced commercial aircraft deliveries and lower bookings.
 Firm backlog at March 31, 1992 was $28.504 billion, compared with $30.448 billion on Dec. 31, 1991, while total backlog was $40.245 billion, down from $42.577 billion on Dec. 31, 1991.
 Employment was 101,893 on March 31, 1992 compared with 115,482 a year earlier, a 12 percent decline.
 As of March 31, 1992 the MD-11 program status included 132 firm orders, 156 options and reserves, and 41 deliveries, for a total of 329 aircraft. On the same date, the MD-80/90 program included 206 firm orders, 314 options and reserves, and 989 deliveries, for a total of 1,509 aircraft.
 McDONNELL DOUGLAS CORP.
 Consolidated Results of Operations
 (Millions of dollars, except share data)
 Three Months Ended
 March 31,
 1992 1991
 Unaudited
 Statement of Earnings
 Revenues $4,147 $4,242
 Costs and expenses:
 Cost of products, services
 and rentals 3,583 3,570
 General and administrative expenses 239 299
 Research and development 139 109
 Interest expense:
 Aerospace and other segments 77 105
 Financial services segment 45 61
 Total costs and expenses 4,083 4,144
 Earnings Before Income Taxes 64 98
 Income taxes 12 40
 Net Earnings $52 $58
 Earnings Per Share $1.34 $1.50
 Dividends Declared Per Share $.35 $.35
 Certain prior year amounts have been restated to reflect the discontinuance of certain information systems operations during the third quarter of 1991.
 McDONNELL DOUGLAS CORP.
 Business Segment Data
 (Millions of dollars)
 Three Months Ended
 March 31,
 1992 1991
 Unaudited
 Business Segment Data
 Revenues
 Military aircraft $1,814 $1,792
 Commercial aircraft 1,449 1,402
 Missiles, space and electronic systems 699 794
 Financial services 85 134
 Other 97 115
 Operating revenues 4,144 4,237
 Non-operating income 3 5
 Total Revenues $4,147 $4,242
 Earnings
 Military aircraft $41 $120
 Commercial aircraft 43 28
 Missiles, space and electronic systems 54 40
 Financial services 2 11
 Other 4 7
 Operating earnings 144 206
 Corporate and other (3) (3)
 Interest expense (77) (105)
 Income taxes (12) (40)
 Net Earnings $52 $58
 The captions "military aircraft" and "commercial aircraft" were shown as "combat aircraft" and "transport aircraft" in prior years. "Military aircraft" now includes 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)
 MAR 31 DEC 31
 1992 1991
 Unaudited
 Assets
 Cash and cash equivalents $128 $229
 Accounts receivable 714 780
 Finance receivables and property
 on lease 2,441 2,621
 Contracts in process and inventories 7,326 7,291
 Property, plant and equipment 2,385 2,414
 Other assets 1,540 1,506
 Total Assets $14,534 $14,841
 Liabilities and Shareholders' Equity
 Liabilities:
 Accounts payable and accrued
 expenses $3,359 $3,327
 Income taxes 1,193 1,273
 Advances and billings in excess of
 related costs 1,760 2,087
 Notes payable and long-term debt:
 Aerospace and other segments 2,571 2,386
 Financial services segment 1,730 1,891
 Total 10,621 10,964
 Shareholders' Equity 3,921 3,877
 Total Liabilities and
 Shareholders' Equity $14,534 $14,841
 McDONNELL DOUGLAS CORP.
 Capital Structure
 (Millions of dollars)
 March 31, 1992
 Unaudited
 Aerospace Financial
 and Services
 Other Segments Segment Total
 Debt $2,571 $1,730 $4,301
 Equity 3,609 312 3,921
 Total $6,180 $2,042 $8,222
 Debt-to-equity ratio .71 5.54
 Dec. 31, 1991
 Aerospace Financial
 and Services
 Other Segments Segment Total
 Debt $2,386 $1,891 $4,277
 Equity 3,517 360 3,877
 Total $5,903 $2,251 $8,154
 Debt-to-equity ratio .68 5.25
 -0- 4/22/92
 /CONTACT: Andrew Wilson, 314-233-1038, or Barbara Anderson, 314-233-2865, both of McDonnell Douglas/
 (MD) CO: McDonnell Douglas Corp. ST: California IN: AIR ARO SU: ERN


KJ -- LA031 -- 1526 04/22/92 17:55 EDT
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