“We made important progress in 1Q and the game plan is to get BDS back to high single digit margins over time.”

In context

“ue to grow as we move towards entering service as we've previously shared. Moving on to the next page and BDS. BDS books $4 billion in orders during the quarter and the backlog ended at $62 billion. Importantly in the quarter BDS was selected by the U.S. Air Force to design, build, and deliver its next generation fighter aircraft BF-47. This order was not included in our first quarter backlog pending the completion of the source selection and evaluation review process. Revenue was $6.3 billion down 9% on planned lower volume including the impact from commercial derivatives associated with the production restart. BDS delivered 26 aircraft in the quarter. Operating margin was plus 2.5% up 30 basis points compared to last year and reflected stabilizing operational performance in the quarter. We made important progress in 1Q and the game plan is to get BDS back to high single digit margins over time. Our core business remains solid representing approximately 60% of our revenue and performing in the mid to high single digit margin range. The demand for these products remains very strong supported by the threat environment confronting our nation and our allies. The roughly 25% of the portfolio that's primarily comprised of fighter and satellite programs operationally performance improved in the quarter which drove favorable margin trends. Lastly, on our fixed price development programs that represent the remaining 15% of revenue we continue to work to stabilize and mature these programs. This quarter's results reflected stabilizing operational performance, and we remain focused on retiring risk each quarter and ultimately delivering these mission critical capabilities to our customers.”