Aerial view of Boeing 777X and Boeing 737 MAX 10 aircraft parked at King County International Airport-Boeing Field in Seattle, Washington on June 1, 2022.
Lindsey Wasson | Reuters
Boeing on Wednesday reported lower revenue and a wider adjusted quarterly loss than analysts expected, but the plane maker maintained its forecast to return to free cash flow in 2022.
The weakness of its defense unit dragged down the results, but was partly compensated 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 company has just won high-profile orders at the Farnborough Air Show such as 100 737 Max 10s from Delta Air Lines. Boeing and rival Airbus customers have benefited from a rebound in travel after demand for flights slumped during the pandemic.
Here’s how the company performed compared to analyst estimates compiled by Refinitiv:
- Adjusted loss per share: 37 cents versus an expected loss of 14 cents.
- Revenue: $16.68 billion vs. $17.57 billion expected.
Boeing swung to an 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 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 is producing an average of 31,737 Max aircraft each month. He said the company won’t 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 staff memo Wednesday. “With safety and quality at the forefront, 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 halted for more than a year after manufacturing defects were discovered.
In January, Boeing said the problems would cost it $5.5 billion, including $2 billion in irregular manufacturing costs, as it cut production to avoid a pile of inventory. Boeing recorded $283 million of that in the second quarter.
Returning 787 deliveries is key for Boeing because customers pay most of the price of an airplane when they receive the planes.
Revenue at the company’s defense unit fell 10% from a year ago, and the company took a $147 million charge on its MQ-25 unmanned refueler 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 737 Max’s return to flying in key jet customer China, the schedule of 777X and its cash flow forecast for this year and next year.
Analysts are also likely to ask Boeing leaders to indicate 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 2% in premarket trading after the results were released.