Breaking News
Investing Pro 0
New Year’s SALE: Up to 40% OFF InvestingPro+ CLAIM OFFER

Boeing reports loss, but first positive free cash flow since 2018

Stock Markets Jan 25, 2023 12:46PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. A model of a Boeing 777X is seen at the Farnborough International Airshow, in Farnborough, Britain, July 19, 2022. REUTERS/Matthew Childs
 
BA
-0.73%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Valerie Insinna and David Shepardson

WASHINGTON (Reuters) -Boeing Co losses widened for 2022 on weakness in its defense unit as it warned of further supply chain issues, but the U.S. planemaker reported its first yearly positive cash flow since 2018.

The U.S. planemaker missed Wall Street expectations on revenue and earnings per share in the final quarter of the year. Boeing shares, which have risen by more than 70% since September, fell 1% Wednesday.

Boeing (NYSE:BA) Chief Executive Dave Calhoun told analysts the planemaker still faces "a difficult, difficult supply chain and while average deliveries met our objectives, we continue to face a few too many stoppages in our lines ... So those stoppages, while they are coming down, are not where they need to be."

Chief Financial Officer Brian West said the company was increasing its abnormal accounting estimate by about $600 million as it expects 787 production to remain lower for "a bit longer than expected due to a supplier constraint," but still expects to raise its production rate to five per month later this year.

Boeing affirmed plans to deliver up to 450 737 MAX narrowbody aircraft and 70 to 80 widebody 787 Dreamliners in 2023. The company reiterated it expects to generate $3 billion to $5 billion in free cash flow in 2023.

Those numbers do not include the much-anticipated restart of Boeing jetliner deliveries to China. Calhoun declined to comment on when Chinese airlines could begin accepting aircraft from Boeing.

"Within China, they need the MAX to fly to satisfy those demands," said Calhoun, who called the potential opening of the Chinese market a "serious bump" for the entire aviation industry.

Boeing previously expressed interest in remarketing a portion of the Chinese 737 MAX planes, but Calhoun said Wednesday Boeing would "pause" its efforts "so that we can discern what China wants to do." 

China Southern Airlines began flying the 737 MAX earlier this month after an almost four-year pause.

About 138 of the 200 737 MAX planes in storage are meant for Chinese customers.

The supply chain issues come as Boeing is working to stabilize and ramp up production.

'SIGNIFICANT PROGRESS'

Third Bridge analyst Peter McNally said Boeing in 2022 was "showing some significant progress in key areas, although the reported financial results were mixed."

Boeing said net losses rose to $5 billion for all of 2022 from $4.3 billion in 2021, while losses from operations rose to $3.5 billion in 2022 from $2.9 billion.

Boeing generated $3.1 billion in free cash flow in the final quarter of 2022. It had forecast about $2.5 billion in free cash flow for the fourth quarter. Boeing reported $2.3 billion for all of 2022.

Boeing reported fourth-quarter revenue of $20 billion, up from $14.79 billion in 2022, and a loss per share of $1.75. Boeing had been expected to report $20.38 billion in revenue in the quarter and a gain of 26 cents a share, according to Refinitiv data.

While supply chain bottlenecks could continue to be a struggle for the aerospace industry at large, McNally pointed out that jetliner demand from airlines remains strong and Boeing has demonstrated an improved ability to ramp up deliveries.

“We haven't had a hiccup in some time in the supply chain and deliveries are directionally improving, and they affirmed the (delivery) guidance,” he said. “As of right now … I don't really have a good reason to doubt their ability to hit these numbers because customer demand is there.”

Last month, Boeing won approval from Congress to lift a deadline imposing a new safety standard for modern cockpit alerts for two new versions of 737 MAX aircraft. Without a waiver, the planemaker had said the MAX 7 and MAX 10 airplanes were at risk.

Calhoun said he thinks the MAX 7 will have its first flights this year and the MAX 10 "probably" next year.

Congress said Boeing must retrofit existing MAX airplanes with safety enhancements as part of that waiver. West said the provision to account for retrofits costs was "small."

Boeing reports loss, but first positive free cash flow since 2018
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email