Boeing, the world’s second aircraft maker by market value, reported a surprising $3.3 billion loss for the third quarter Wednesday, 26, October 2022. Revenue fell short of expectations and it took huge losses for fixed-cost government programs including the new Air Force One presidential jet.
CEO David Calhoun said Boeing remains in a “challenging environment” and has “more work ahead to drive stability.”
Boeing reported an adjusted loss, excluding certain items, of $6.18 a share, 10 times the loss a year ago, compared with a consensus estimate for a profit of $0.11 a share. The company lost $2.8 billion on fixed-price development programs for its defense business (military refueling tanker, Air Force One, a NASA program), including higher manufacturing and supply chain costs.
Revenue rose 4% to $16.0 billion, below analysts’ estimates of an 18% increase to $18 billion. Boeing’s commercial airplane revenue rose 40% even though deliveries came in below analyst estimates.
“We’re not embarrassed by those,” Calhoun said on a call with analysts. “They are what they are.”
Boeing officials said they were working more closely with suppliers to reduce disruptions at Boeing factories.
Demand for commercial jets plummeted early in the pandemic as supply chain delays and quality control issues hindered production, then picked up as travel restrictions eased. It has also restarted deliveries of its 787 after a year of delays due to a failure to meet U.S. regulatory standards. Boeing said demand for its commercial airplanes remains strong.
Investors seemed to overlook the bottom-line numbers and focus on the surprisingly large cash flow figure. Cowen analyst Cai von Rumohr said it was driven by higher deliveries of airline planes, which indicates that the company is working down inventories.
Calhoun highlighted the cash flow number on the call with analysts and a letter to employees, both of which referred to Boeing’s ongoing turnaround effort.
“That said, we remain in a challenging environment and have more work ahead to ensure we’re consistently delivering on our commitments and reestablishing the strength of our company,” Calhoun told employees. He said Boeing production facilities are “not pushing the system too fast. We’re slowing down when necessary” to make sure work gets done.