Boeing (NYSE:BA), under the leadership of CEO David Calhoun, has reported a third quarter loss of $1.64 billion due to decreased deliveries of commercial planes, including its best-selling 737 Max, and increased costs for two new Air Force One jets. This announcement came Today, as the company also revised its 737 Max production forecast down from an initial estimate of 400-450 to between 375-400 due to issues with a pressure-sealing section that required inspections and additional work.
The aerospace giant has been grappling with quality issues at Spirit AeroSystems (NYSE:SPR), including a defect with misdrilled holes on the 737 MAX 8 aircraft. These challenges have led to a drop in Q3 deliveries to just 70 737s and a cash burn of $310 million.
Despite these setbacks, Boeing's shares rose about 3% in premarket trading Today. The company remains focused on stabilizing the supply chain and ramping up aircraft production rates to meet their financial goals for the year.
Boeing also incurred losses of $482 million on the Air Force contract and $315 million on a satellite contract. Despite these losses and lower 737 deliveries, the company's revenues rose by 13% to $18.10 billion. The loss per share stood at $3.26, slightly more than the $3.18 predicted by analysts.
While there was a decrease in 737 deliveries compared to the previous year, Boeing saw an increase in 787 Dreamliner deliveries. The company plans to increase the 737 output to 38 planes per month by year-end and transition to five Dreamliners per month.
Despite facing delivery delays and production flaws, Boeing has upheld its free cash flow projection for 2023 at between $3 billion and $5 billion. The company is committed to increasing production to meet post-pandemic air travel demand, even as these delays have forced customers like Ryanair (NASDAQ:RYAAY) to adjust their schedules.
In Q3 2022, Boeing's commercial aircraft unit sales rose by 25% to $7.88 billion, largely due to deliveries of wide-body 787 Dreamliner planes. However, abnormal production costs and lower 737 deliveries led to an 8.6% negative operating margin.
Despite the challenges, analysts remain optimistic about Boeing's future due to robust order books, including IndiGo's order of 500 Airbus aircraft and Akasa Air's order for four Boeing 737 Max jets.
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