Anyone participating in a Boeing results or investors’ presentation can’t fail to notice that the company’s global services segment gets barely any attention. Yet with revenue of $17.6 billion and positive earnings from operations, Boeing Global Services (BGS) accounted for nearly 30 percent of the U.S. aerospace giant’s total revenue and nearly all its operating profits last year.
BGS’s financial performance clearly outshines that of its more well-known peer segments, Commercial Airplanes (BCA) and Defense, Space, and Security (BDS). In 2022, BGS reported a 15.5 percent operating margin while both BCA’s and BDS’s operating margin ended in negative territory, specifically 9.2 percent and 15.3 percent, respectively. With a 17.9 percent operating margin in the first quarter of this year, the services segment exceeded pre-pandemic margins and again represented Boeing’s only profitable business segment. BGS received $4 billion in orders during the quarter and the backlog stood at $19 billion. Revenue totaled $4.7 billion, up 9 percent year-over-year. “We're set up very well to deliver a mid-single-digit revenue growth business with mid-teens margins and a high cash flow conversion,” commented Boeing CFO Brian West. “We get more and more confident about that business and the team that's running this, so I think it's going to accrue to our benefit over the next several years. We love the service business, right? It's a franchise, it goes on for years and years and years.”
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