Boeing, a central player on the Pentagon side of the current U.S. nuclear arsenal modernization, broke its own sales and earnings records for the year and quarter ended Dec. 31, the Chicago-based defense prime said Wednesday.
Among other things, Boeing is working on designs for next-generation nuclear-armed intercontinental ballistic missiles and production of a tail kit for the revamped B61-12 gravity bomb.
At the Defense, Space & Security segment that includes the company’s nuclear weapons work for the Pentagon, annual operating profit fell to about $1.5 billion. That is down roughly 25 percent from $2 billion a year ago. However, annual segment revenue rose nearly 15 percent to almost $25 billion, from around $20 billion in 2017. Quarterly earnings from operations in the segment rose to about $670 million, up some 25 percent year-over-year from about $545 million.
Overall, and including its flagship commercial aircraft division, Boeing posted annual net earnings of nearly $10.5 billion in 2018, up almost 25 percent from about $8.5 billion in 2017. Yearly earnings per share landed at $17.85, up nearly 30 percent from $13.85, Boeing said. Revenue for the year was just over $100 billion, rising from $95 billion in 2017.
Fourth-quarter net earnings were roughly $3.4 billion, up around 3 percent from $3.3 billion in 2017. On a per-share basis, quarterly earnings rose nearly 10 percent to $5.93 from $5.49. Revenue for the quarter rose almost 15 percent to just under $30 million, from just under $25 million a year ago.
Boeing and Northrop Grumman are maturing competing designs for the next-generation intercontinental ballistic missile, the Ground Based Strategic Deterrent (GBSD), under Pentagon contracts awarded in 2017 and worth about $350 million and $330 million, respectively, over three years. The Pentagon will choose one of the designs in 2020, with the intent of fielding the new missile around 2027.
GBSD could use either W78 or W87 warheads provided by the Department of Energy’s semi-autonomous National Nuclear Security Administration (NNSA). The current intercontinental ballistic missile fleet, comprised of Boeing-designed Minuteman III missiles, uses both warheads.
NNSA is still working on feasibility studies for a so-called interoperable warhead, which would feature a nuclear-explosive package usable in both ground- and sea-launched ballistic missiles. In NNSA’s 2019 funding bill, Congress ordered the agency to compare the costs of an interoperable warhead with the cost of refurbishing the W78.
In December, the Pentagon cleared Boeing to start production on crucial tail kit hardware for the B61-12 next-generation nuclear gravity bomb.
The B61-12’s guided tail-kit assembly helps control the weapon during free fall. The Air Force is also responsible for integrating the NNSA-made bomb with carrier aircraft, including versions of the B-2, the planned B-21, F-15, F-16, F-35, and the German-made PA-200, according to the Air Force Nuclear Weapons Center.
The Air Force expects the guided tail-kit assembly program to cost a little under $3 billion to complete over roughly 20 years, according to a 2016 Pentagon audit. Boeing got its Air Force contract to build the tail kit in 2012.
