The FINANCIAL -- The Boeing Company reported second-quarter revenue of $24.3 billion reflecting higher commercial deliveries and mix, defense volume and services growth.
GAAP earnings per share increased to $3.73 and core earnings per share (non-GAAP)* increased to $3.33 reflecting solid execution across the company. Results also reflect a charge related to the previously announced Spirit litigation outcome ($0.21 per share). Boeing delivered strong operating cash flow of $4.7 billion, repurchased $3.0 billion of shares, and paid $1.0 billion of dividends.
The company's revenue guidance increased $1 billion to between $97.0 and $99.0 billion, driven by defense volume and services growth. Commercial Airplanes margin guidance is increased to greater than 11.5% on strong performance and Defense, Space & Security margin guidance was adjusted to reflect the impact of cost growth on the KC-46 Tanker program.
Operating cash flow in the quarter of $4.7 billion reflects planned higher commercial airplane production rates, strong operating performance, and timing of receipts and expenditures (Table 2). During the quarter, the company repurchased 8.6 million shares for $3.0 billion, leaving $12.0 billion remaining under the current repurchase authorization which is expected to be completed over approximately the next 18 to 24 months. The company also paid $1.0 billion in dividends in the quarter, reflecting a 20 percent increase in dividends per share compared to the same period of the prior year.
Cash and investments in marketable securities totaled $9.8 billion, compared to $9.9 billion at the beginning of the quarter (Table 3). Debt was $12.1 billion, down from $12.5 billion at the beginning of the quarter due to repayment of debt.
Total company backlog at quarter-end was $488 billion, up from $486 billion at the beginning of the quarter, and included net orders for the quarter of $27 billion.
Commercial Airplanes second-quarter revenue was $14.5 billion reflecting higher deliveries and mix (Table 4). Second-quarter operating margin increased to 11.4 percent, reflecting strong operating performance on production programs, including a higher 787 margin, partially offset by a charge of $307 million related to cost growth on the KC-46 Tanker program. This cost growth was primarily due to higher estimated costs of incorporating changes into six flight test and two early build aircraft as well as additional costs as we progress through late stage testing and the certification process. We continue to make steady progress towards final certification for KC-46 Tanker and recently completed all flight tests required to deliver the first aircraft, which is expected to be in October this year as now agreed upon with the U.S. Air Force.
During the quarter, Commercial Airplanes delivered 194 airplanes, including delivery of the first 737 MAX airplanes to Jet Airways, Ethiopian Airlines, and Xiamen Airlines. The 737 MAX program celebrated the one year anniversary of entering revenue flight service and continues to be well received in the market with over 4,600 orders since its launch. The 777X program remains on track for delivery in 2020 as the first two test airplanes moved into the low-rate initial production line.
Commercial Airplanes booked 239 net orders during the quarter, including 91 widebodies. Backlog remains robust with nearly 5,900 airplanes valued at $416 billion.
Defense, Space & Security
Defense, Space & Security second-quarter revenue increased to $5.6 billion driven by F/A-18 and weapons volume (Table 5). Second-quarter operating margin was 9.3 percent, primarily reflecting KC-46 Tanker cost growth of $111 million, partially offset by solid execution and favorable mix.
During the quarter, Defense, Space & Security finalized a production contract for 28 F/A-18 Super Hornets for Kuwait, received contracts for 18 additional F/A-18 Super Hornets and 3 P-8 Poseidon aircraft for the U.S Navy, and was awarded a multi-year contract for 58 V-22 Osprey aircraft. Significant milestones during the quarter included induction of the first F/A-18 aircraft into the Service Life Modification program, two successful tests for the U.S. Air Force's Minuteman III, and the completion of the 100th P-8 Poseidon aircraft. On the commercial satellites side, we successfully completed O3b mPOWER preliminary design review with SES.
Backlog at Defense, Space & Security was $52 billion, of which 35 percent represents orders from international customers.
Global Services second-quarter revenue increased to $4.1 billion, reflecting growth across the portfolio (Table 6). Second-quarter operating margin was 14.7 percent reflecting product and services mix.
During the quarter, Global Services was awarded an F/A-18 depot maintenance contract for the U.S. Navy and Marine Corps and secured rotorcraft performance based logistics contracts for the Netherlands. Global Services also contracted to implement crew management solutions at Etihad Airways and captured a Global Fleet Care contract for Primera Air's 737 fleet. Global Services also entered into an agreement to acquire KLX Aerospace which will broaden our range of offerings and increase customer value, and agreed to a strategic partnership with Safran for auxiliary power units as we strengthen Boeing's vertical capabilities and expand our services portfolio.
Additional Financial Information
At quarter-end, Boeing Capital's net portfolio balance was $3.0 billion. Total pension expense for the second quarter was $70 million, down from $94 million in the same period of the prior year. The change in earnings from other unallocated items and eliminations is primarily due to the previously announced litigation charge. The effective tax rate for the second quarter decreased from the same period in the prior year primarily due to the reduction of the federal tax rate to 21%.