Boeing (BA) profit for the second quarter of 2022 falls short of estimates

An 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.

Lindsey Wasson | Reuters

Boeing on Wednesday stuck to its forecast of a return to free cash flow this year as it prepares to resume delivery of its 787 Dreamliner aircraft after manufacturing defects have temporarily halted delivery for most of the past two years.

The company’s second-quarter results came in below analyst estimates. Weakness in its defense unit dragged down results, but was partially offset by the strength of its commercial aircraft unit. 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 airline is new to winning high-profile orders at the Farnborough Air Show such as those for Delta Air Lines’ 100737 Max 10s. Customers of rival Boeing and Airbus have benefited from a travel revival after demand for flights slumped during the pandemic.

Here’s how the company performed compared to analyst estimates that Refinitiv complied with:

  • Adjusted loss per share: 37 cents versus an expected loss of 14 cents.
  • he won: $16.68 billion versus the $17.57 billion forecast.

Boeing turned to operating cash flow of $81 million in the quarter after burning $483 million in the same period last year. The Arlington, Virginia-based company reported net income of $160 million, down 72% from a year ago 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 jets each month. He said the company would not raise production too quickly due to supply chain and labor constraints. Rival Airbus has voiced similar concerns.

“Even with high demand, we won’t chase production rates or push our system too quickly,” Calhoun said in a task force memo on Wednesday. “With safety and quality at the fore, we will prioritize stability and predictability.”

He also confirmed that Boeing is “in the final stages” of preparations to resume deliveries of its 787 Dreamliners, which have been suspended for more than a year due to production defects.

In January, Boeing said the issues would cost it $5.5 billion, including $2 billion in irregular manufacturing costs with production restarts to avoid inventory buildup. Boeing posted $283 million of that in the second quarter.

The return of the 787 deliveries is key to Boeing because customers pay the bulk of the price of the plane when they take delivery of the planes.

The company’s defense unit revenue is down 10% from last year, and the company incurred $147 million on unmanned MQ-25 refueling due to higher costs.

Boeing executives will discuss the results with analysts at 10:30 a.m. Wednesday, as they will likely face questions about the return of the 737 MAX to flying in China, a major aircraft customer, the timing on the 777X and cash flow projections for this year and next.

Analysts are also likely to ask Boeing leaders when they expect to win US certification for the 737 Max 10, the largest in the Max family.

Boeing shares are down more than 22% so far this year. Shares rose more than 2% in pre-market trading after the results were announced.

Leave a Reply

%d bloggers like this: