Boeing 1Q15 Earnings Call Notes

Revenue up 21%

“Revenue at Boeing commercial airplanes increased 21% to 15.4 billion and operating margins were 10.5%. We delivered 184 commercial airplanes in the quarter and added 110 net new orders.”

Very good times for our industry

” conversations with our airline customers continue to center on new purchases or accelerating delivery slots. Deferral requests are still running well below to historical average, these remain very good times for our industry.”

Airline profitability drives airplane sales

“historically airplane orders are highly correlated to airline profitability. And lower oil prices have not fundamentally changed our customers view on fleet planning or their commitment to existing delivery schedules.”

Defense outlook is optimistic

“it’s a matter of sort of Ryan Murray 2.0 sort of maybe extending the kind of budget compromise that had been fashioned a couple of years ago, another couple of years, and that may turn into a broader consensus dealing with sequestration in a balanced way.

So, it’s little more optimism that that will sort out and based on newspaper reports I’ve seen, Murray and Ryan are working together again trying to come up with some kind of a budget compromise that would include the defense portion. We’re well marked up in the President’s budget request, more than our fair share of sort of the jump balls, I guess is the way to put it. ”

A lot of our demand is replacement demand

“remember a lot of the demand out there is replacement demand, new technology replacing old technology. We’re in a technology cycle now we’re not tied to GDP growth. We’re tied to very favorable replacement economics and so half of our growth is replacement, the half is sort of new routes, new airlines opening up and new deliveries, more tied to GDP. But that’s the nice thing about what innovation can do for you.”