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Boeing delivered 121 commercial jets in the second quarter of 2022, up from 95 delivered in the first quarter.
Justin Tallis/AFP via Getty Images
Boeing’s quarterly earnings were messy, again.
And on the company’s earnings call, more bad news related to the 737 MAX sent the stock paring all of its gains after a strong start on Wednesday.
Boeing (ticker: BA ) reported an adjusted loss of 37 cents per share on sales of $16.7 billion in the second quarter. Wall Street was looking for a profit of 1 cent per share on sales of $17.6 billion. It’s the company’s fourth consecutive earnings loss.
Shares rose about 4% at the day’s high as investors saw the company burn through less cash in the latest quarter. But those gains have been surrendered, and shares are down about 1% in afternoon trading on Wednesday. The S&P 500 and Dow Jones Industrial Average rose 1.3% and 0.2%, respectively.
The problem appears to be the slowdown in 737 MAX deliveries. Management now expects MAX deliveries to be in the “low 400s” for the full year. Wall Street expected to reach 450 deliveries MAX.
Boeing delivered 121 commercial jets in the second quarter of 2022, including 100 MAX jets, compared to 95 commercial jets delivered in the first quarter. Before the pandemic and the 737 MAX problems, Boeing delivered about 190 planes in the second quarter of 2018.
But there was also good news. The company burned through about $200 million in the second quarter, down from $3.6 billion in the first quarter. It was also well short of the roughly $520 million that analysts had projected.
“We made significant progress on key programs in the second quarter and are building momentum in our turnaround,” CEO Dave Calhoun said in the company’s press release. “As we begin to meet key milestones, we were able to generate positive operating cash flow this quarter and remain on track to achieve positive free cash flow by 2022.”
Positive free cash flow for the full year would be nice, but not a complete surprise. Wall Street is modeling free cash flow to be roughly flat through 2022. The company spent about $4.4 billion in 2021.
The business unit’s operating loss was $242 million, better than the $859 million loss in the first quarter of 2022.
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The Defense, Space and Security business posted earnings of $71 million after a loss of $929 million in the first quarter. A profit is nice, but this business can make hundreds of millions a quarter. Earnings were again hampered by charges on fixed-price defense contracts.
Overall, it looks like a better report than the one Boeing released in April. Shares then fell 7.5% after missing significant gains.
The Covid-19 pandemic and issues with the 737 MAX and 787 have made forecasting results incredibly difficult.
The MAX was grounded worldwide between March 2019 and November 2020 after two fatal crashes in five months. And the 787 hasn’t been delivered in over a year after some manufacturing quality issues were discovered.
Some of the issues driving the quarterly volatility are out of Boeing’s hands, says Vertical Research Partners analyst Rob Stallard. “787 clearance, MAX return to flight to China, MAX 10 [certification] extension, and I would probably add supply chain/inflation to the list as well,” says Stallard.
In trading Wednesday, Boeing shares are down about 23% year to date, while the S&P 500 and Dow Jones Industrial Average are down 18% and 13%, respectively. The stock is down about 65% from its all-time high shortly before the second MAX crash.
Write to Al Root at allen.root@dowjones.com