Oct 22, 2015

Boeing Enjoys Record Revenues, 25 Percent Profit Increases — Without Ex-Im

Post by Derek Yale

Arlington, VA — Despite using doom and gloom scare tactics to try to keep taxpayer subsidies flowing from the Export-Import Bank, Boeing on Wednesday reported record earnings for its latest quarter, which coincided directly with Ex-Im’s expiration.

The world’s largest aerospace company reported a 9 percent increase in overall revenue and a 25 percent increase in profit during the period of July through September.

Boeing was the largest beneficiary of the Export-Import Bank before its expiration on June 30, 2015, and has made threats to lawmakers and its own employees that it would move business functions to other countries if the bank wasn’t reauthorized.

Freedom Partners Senior Policy Advisor Andy Koenig issued the following statement:

“Boeing’s post-Ex-Im doom and gloom narrative turned into 25 percent profit increases for the company. Weak arguments for reauthorizing the crony bank are made embarrassingly weaker by the record revenues that Ex-Im beneficiaries like Boeing and General Electric are currently enjoying.”

Boeing Enjoys 25% Profit increase And 9% Revenue Boost Without Ex-Im

Boeing’s Profit Soared 25 Percent Last Quarter. “Boeing Co. said profit soared 25% in its latest quarter as it continued to churn out record deliveries of commercial jets, and it said it is on track to reduce costs on its flagship 787 Dreamliner that have been the source of concern among some analysts and investors.” (Doug Cameron, “Boeing Raises 2015 Outlook as Profit Climbs 25%,” Wall Street Journal, 10/21/15)

Boeing’s Overall Revenue Grew 9 Percent In The Third Quarter Of 2015. “Overall revenue grew 9% during the period, to $25.8 billion from $23.8 billion a year earlier.” (Bart Jansen, “Boeing earns $1.7B in 3Q based on record commercial plane deliveries,” USA Today, 10/21/15)

Boeing: Company Made “Record Quarterly Revenue.” (Dennis Muilenburg and Greg Smith, “Third-Quarter 2015 Performance Review,” Boeing, 10/21/15)

Boeing Chief Executive Dennis Muilenburg: Jetliner Market “Generally Remains Healthy.” “Chief Executive Dennis Muilenburg said the jetliner market ‘generally remains healthy.’” (Doug Cameron, “Boeing Raises 2015 Outlook as Profit Climbs 25%,” Wall Street Journal, 10/21/15)

Boeing Was Hardly Worried

Boeing CEO Dennis Muilenburg: “Boeing Won’t Feel Near-Term Financing Pressure” Without The Bank. “Boeing Co. won’t feel near-term financial pressure if Congress fails to reauthorize the Export-Import Bank in coming days, said the company’s new chief executive officer, Dennis Muilenburg . . . during a conference call to discuss the aircraft maker’s second-quarter earnings.” (Vipal Monga, “Boeing Doesn’t Fear Near-Term Financing Risk If Ex-Im Fails,” Wall Street Journal, 07/22/15)

Boeing CEO Dennis Muilenburg: “There Are Multiple Commercial Credit Source Available.” “There are multiple commercial credit sources available today. . . . [The current financing market] doesn’t create risk for us.” (Vipal Monga, “Boeing Doesn’t Fear Near-Term Financing Risk If Ex-Im Fails,” Wall Street Journal, 07/22/15)

“Managing Director At Boeing’s Finance Arm . . . Confident The Company Could Find Alternative Funding Sources For Customers.” “Kostya Zolotusky, a managing director at Boeing’s finance arm . . . said he was confident the company could find alternative funding sources for customers that wouldn’t require it to boost its support of aircraft sales, but said Boeing remains ‘mindful’ of the debate over Ex-Im’s future.” (Doug Cameron, “Boeing Cites Jitters Over Airplane Financing From Ex-Im Bank,” Wall Street Journal, 08/07/13)

Tim Neale, Boeing’s Spokesman, Stated The Company Would Be Able To Provide Funding. “We can provide some financing in the near term.” (Kathleen Miller, “Killing U.S. Ex-Im Bank Seen Foolish Yet Not End Of Civilization,” Bloomberg, 06/02/15)

In Boeing’s Own Annual Report It States They May Fund Additional Commitments Or Enter Into New Financing Arrangements With Customers If The Ex-Im Bank Expires. “In September 2014, the bank’s charter was extended and is now set to expire on June 30, 2015. If the bank’s charter is not renewed or if the bank’s existing or future funding authority is insufficient to meet our customers’ needs, we may fund additional commitments and/or enter into new financing arrangements with customers.” (“2014 Annual Report,” The Boeing Company, 04/22/15)

One Of Boeing’s Largest Customers Stated They Will Keep Buying Boeing Aircrafts If The Export-Import Bank Expires. “Emirates, Dubai’s flagship airline, would not have trouble buying planes from Boeing even if the U.S. Congress fails to renew the U.S. Export-Import Bank’s charter later this month, a senior company executive said on Friday. . . . Emirates is one of the biggest buyers of Boeing airplanes and in November placed a record order for Boeing’s next-generation 777X.” (Jeffrey Dastin, “Emirates Airline Says Ex-Im Bank Not Critical For Its Plane Financing,” Reuters, 09/05/14)

FLASHBACK: Boeing Warns Of “Wild West” Doomsday Without The Ex-Im Bank:

Former Boeing CEO: “If Ex-Im Goes Away, You’d Have The Wild West.” “Most of my engineering and manufacturing jobs are in the United States and I’d like to keep it that way. But without Ex-Im financing, you’d have to start asking the question’ about where they should be, [Boeing chief executive Jim] McNerney said at a conference sponsored by the U.S. export credit agency. . . . ‘If Ex-Im goes away, you’d have the Wild West.’” (David Morgan, “Boeing CEO Warns of Job Relocations if U.S. Ex-Im Bank Disappears,” Reuters, 04/23/15)

“The Bank’s Backers Argue That It . . . Helps Level The Playing Field For U.S. Exporters.” (Andrea Shalal, “Exclusive: Boeing Loses Large Satellite Deal Due To Trade Credit Woes,” Reuters, 08/04/15)

“The Company [Is] Actively Considering Moving ‘Key Pieces’ Of The Company To Other Countries.” “Boeing Co Chairman Jim McNerney on Wednesday said the company was actively considering moving ‘key pieces’ of the company to other countries given the ongoing debate in the U.S. Congress over the future of the Export-Import Bank.” (Andrea Shalal, “Boeing Says Thinking Of Moving Work Overseas Due To ExIm Saga,” Reuters, 07/29/15)