Randy's Journal: Archives
26 July 2006
2Q 2006
Back in Seattle just in time for the release of Boeing's second quarter earnings report.
And taking a look at the data, I just have to reflect on the hype surrounding orders at Farnborough last week. As someone said during the show, Boeing measures its results over a 52 week period. An air show is just one week out of 52. So this business about who "won" the air show really misses the point.
A number of years ago we decided we were not going to save up orders for air shows. And as a result you will see that Boeing customers make announcements throughout the year - including a few during air show week. Rather than try to keep score during an air show, the place to track our booked orders all through the year is our Orders and Deliveries Website, which you can check out at any time. It is updated every week, on Thursdays.
As the second quarter results show, at the end of the first half of 2006 we had close to 500 gross orders on strong customer demand - more than 300 of those orders coming in the second quarter.
We had a good quarter in terms of deliveries as well - up 14% to 97 deliveries. In comparison, in the second quarter of 2005 we delivered 85 airplanes. We've been successfully managing our production ramp-up and expect to hit our target of 395 deliveries for the full year.
Solid progress continues on the 787 program. This is the first Dreamliner demonstration wing box. It was designed and built by a joint team of Boeing, Mitsubishi Heavy Industries, and Fuji Heavy Industries, and will be tested at Boeing's developmental center in Seattle.
Of course the 787 program is an important area of focus as we get ready for the start of flight testing in 2007. Work began last month on the first major assembly of the Dreamliner as Fuji Heavy Industries began assembling the center wing box. The program now has 364 firm booked orders from 25 customers.
And as Boeing's chief financial officer, James Bell, noted this morning, we're increasing our R&D investment to help focus on 787 program goals relating to weight and schedule. The program is on track to meet its overall budget, its performance commitments, and its 2008 entry into service.
It was a solid quarter for all of Commercial Airplanes. Orders included 18 787s, 22 777s, 262 Next-Generation 737s, and 9 747s.
Highlights of the past quarter include an order for 79 737s with Southwest, 30 737-900ERs for launch customer Lion Air, and 24 737s and 13 787s for Continental. BCA's backlog is now at a record $142 billion.
Our momentum is incredible - sold out for 2006, and more than 99% sold out to our guidance of 440-445 airplanes in 2007. Commercial Airplanes president and CEO Alan Mulally pointed out in a message to employees that we're committed to continuous productivity improvement. We have a product strategy that's sharply focused on our customers. And those customers are responding to our market-leading customer support, as well as to our family of lighter, faster, more fuel-efficient airplanes.
At about the mid-point of the year, that's a good place to be in.