Aerial view of Boeing 777X and Boeing 737 MAX 10 aircraft parked at King County International Airport-Boeing Field, in Seattle, Washington, June 1, 2022.
Lindsay Wasson | Reuters
Boeing on Wednesday stuck to its forecast of a return to free cash flow this year as it prepares to resume deliveries of its 787 Dreamliner jets after manufacturing defects halted deliveries for most of the past two years.
The company’s second-quarter results fell short of analysts’ forecasts. Weakness in the defense unit dampened results, but was partially offset by strength in the commercial aircraft division. Aircraft deliveries rose to 121 in the second quarter from 79 a year ago, while commercial aircraft revenue rose 3% to more than $6.2 billion.
The company has just won major orders at the Farnborough Air Show, such as those for 100 737 Max 10 aircraft from Delta Air Lines. Customers of Boeing and rival Airbus are benefiting from a recovery in travel after demand for flights fell during the pandemic.
Here’s how the company fared compared to analyst estimates aligned with Refinitiv:
- Adjusted loss per share: 37 cents versus an expected loss of 14 cents.
- Revenue: $16.68 billion vs. $17.57 billion expected.
Boeing hit operating cash flow of $81 million in the quarter after burning through $483 million in the same period last year. The Arlington, Virginia-based company reported net income of $160 million, down 72% from a year earlier on revenue of $16.68 billion, down 2% from the second quarter of 2021.
CEO Dave Calhoun said earlier this month that the company produces an average of 31,737 Max aircraft each month. He said the company would not ramp up production too quickly because of supply chain and labor constraints. Rival Airbus has expressed similar concerns.
“Even with high demand, we will not chase production rates or push our system too fast,” Calhoun said in a memo to employees Wednesday. “With safety and quality at the fore, we will prioritize stability and predictability.”
He also reiterated that Boeing is “in the final stages” of preparations to resume deliveries of its 787 Dreamliners, which have been grounded for more than a year due to manufacturing defects.
In January, Boeing said the problems would cost it $5.5 billion, including $2 billion in irregular production costs, as it cuts production to avoid stockpiling. Boeing booked $283 million of those in the second quarter.
Returning 787 deliveries is key for Boeing because customers pay most of the plane’s price when they receive the planes.
Revenue at the company’s defense division fell 10% from a year earlier, and the company took a $147 million charge on its MQ-25 unmanned aerial vehicle due to higher costs.
Boeing executives will discuss the results with analysts at 10:30 a.m. Wednesday, when they are likely to face questions about the return of the 737 Max to flights in key jet customer China, the timing of the 777X and the cash flow forecast for this year and next .
Analysts are likely to ask Boeing leaders to outline when they expect to win US certification for the 737 Max 10, the largest of the Max family.
Boeing shares are down more than 22% so far this year. Shares rose more than 3% in premarket trading after the results were released.
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