The Boeing (BA) Q1 2017

posted in: Earnings Call, Notes | 0

Dennis A. Muilenburg – President and CEO

Airline activity is picking up. 

“…we still see solid airline profitability and strong passenger traffic that continues to outpace global GDP. According to the International Air Transport Association, the 8.8% year to date passenger traffic growth adjusted for the leap year is well above the long-term average of 5.5%. And with the recovery in global trade, we are now seeing modest improvements in cargo traffic.These favorable industry trends, combined with our robust backlog of more than 5,700 aircraft, underpin our planned production rate increases over the remainder of this decade.”

Passenger traffic picking up

“…we’re continuing to see strong passenger traffic growth in particular. It’s only one quarter, but 8.8% passenger growth in the first quarter this year, again just speaks to the fundamental strength of the marketplace.”

On defense spending

“…we’re seeing a flat to moderately up top line on the defense business over the next five years. Some of this is dependent on where we end up on the U.S. defense budget. As you know, we’re still under sequestration. It’s the law of the land, and we’re hopeful and there’s some signs that alternatives to sequestration are going to come through as the new baseline…. what we’re hearing from our customers and what we’re seeing from the new administration and from the Hill are encouraging signs in terms of adding robustness to the defense budget and selectively growing

Gregory D. Smith – CFO

On tax reform

“….we don’t have any cash offshore, other than cash that supports our operations. So we’re not in a situation where repatriation is an issue or a priority. Broadly speaking, we’re a supporter of tax reform. And simplifying the tax code, as well as getting the rate to a point of being able to compete on a global scale, is certainly something that we support. And again, we’re looking for efficiency in the tax system as well as the rate….But at the highest level, we’re a big supporter of tax reform. It’s going to drive jobs. It’s going to drive the U.S. economy, broadly speaking. And it’s going to allow us to compete in any, whether – doesn’t matter what industry you’re in. If you’re a global company, it’s going to allow you to compete on a global platform.”