Boeing posts fifth consecutive quarterly loss

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By Bryan Corliss

October 26, 2022, (c) Leeham News: Boeing Co. posted an operating loss of nearly $2.8 billion for the third quarter, citing losses on fixed-price defense development programs that offset 4% overall revenue growth.

The consensus of Wall Street analysts earlier this week was that Boeing would report earnings of 13 cents a share and snap a four-quarter losing streak. Instead, Boeing posted a loss of $5.49 per share.

Boeing had positive operating cash flow of nearly $3.2 billion for the quarter. Year-to-date, Boeing has generated $55 million in free cash.

“We generated strong cash during the quarter and are on track to achieve positive free cash flow for 2022,” Chairman and CEO Dave Calhoun said in the company’s earnings release. “At the same time, revenue and earnings were significantly impacted by losses on our fixed-price defense development programs.”

Calhoun said the company is “squarely focused on maturing these programs,” but added “we remain in a challenging environment and still have work to do.”

“I am proud of our team and the progress we have made to strengthen our business,” he concluded.

BCA deliveries and revenue increase

Boeing reported revenue of $15.96 billion for the quarter, up 4% from the same quarter last year.

Boeing Commercial Airplanes delivered 112 aircraft in the quarter, up 32% from a year ago. BCA’s revenue jumped 40% to $6.26 billion. The increases are due to the resumption of 787 deliveries and an increase in 737 deliveries, Boeing said.

However, the business unit lost $643 million and posted a negative operating margin of 10.3%.

Boeing said 787 production is currently at an unspecified “low” rate with “graduates expected to return to five per month over time.”

Boeing was producing 14,787 per month, before the pandemic.

Shortly after Boeing’s earnings release, Alaska Airlines announced it was exercising options on 52 Boeing 737 MAX aircraft, for delivery between 2024 and 2027. Alaska has now confirmed orders for 146 MAX aircraft. The airline also said it had obtained options on 105 other planes through 2030.

Boeing announces big losses in Defense, Space and Security

On the defense side, revenue fell 20% to $5.31 billion, compared to the same quarter last year. Boeing had reported a positive operating margin of 6.6% for the quarter in 2021; which collapsed to a negative margin of 53% in the third quarter of this year.

Losses were recorded on many of Boeing’s premier defense and space programs, including the KC-46 tankers, Air Force One, T-7 trainers and the Boeing Starliner commercial crew space capsule. The company attributed the losses to “higher manufacturing and supply chain costs, as well as technical challenges”, and noted that “results were also impacted by unfavorable performance on other programs “.

This post will be updated.

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