Boeing’s defence unit incurred losses of $222 million against a pair of fixed-price contracts in the first quarter of this year, but was buoyed by strong order performance during the same period.
Speaking during a 24 April earnings call, Boeing chief financial officer Brian West detailed the combined loss as totalling $128 million on the KC-46 tanker programme and $94 million on the T-7A advanced jet trainer. This reduced its net earnings during the quarter to $151 million.
Despite the financial hit, West notes: “The tanker continues to show good progress, [although] it does get impacted somewhat by our determination to reduce travelled work. The tankers are performing in the field, we are getting a better handle on what that needs to look like over time, and we are confident that we are de-risking it.”
Boeing has so far delivered 81 of the 767-derived type to the US Air Force, which is to acquire 179 examples. Japan also has fielded three KC-46As.
West expects Boeing’s financial performance on the tanker programme to recover and deliver percentage margin returns in the “high single-digits” in the 2025-2026 timeframe.
Additionally, “The T-7A test aircraft completed climate lab testing in February and the programme continues to progress, with [US] Air Force flight testing,” he says. Conducted at Eglin AFB in Florida, the climatic testing exposed the type to temperatures ranging from 43°C (110°F) to -31°C.
The Red Hawk is being acquired as a replacement for the service’s aged Northrop T-38C fleet.
First-quarter revenue at Boeing Defense, Space & Security was $6.95 billion, representing a 6% rise from just over $6.5 billion in the same three-month period a year earlier.
Order highlights from the first three months of this year included its receipt of orders to produce 14 P-8A Poseidon maritime patrol aircraft for Canada and another three for Germany, plus a final 17 F/A-18E/F Super Hornets and two MQ-25 Stingray test aircraft for the US Navy.
Meanwhile, the company delivered only 14 military aircraft in the first three months of the year: down from 39 in the same period of 2023.
Its latest shipment total included six remanufactured AH-64 Apache attack helicopters, three KC-46 tankers, two CH-47 Chinook transport helicopters (one new and one “renewed”), and lone examples of the F/A-18E/F Super Hornet and F-15 fighters and P-8.
The company’s defence unit order backlog was worth $60.7 billion as of 31 March.
