Boeing Co losses widened for last year on weakness in its defense unit as it warned of further supply chain issues, but the US aircraft manufacturer reported its first yearly positive cash flow since 2018.
Boeing missed Wall Street expectations on revenue and earnings per share in the final quarter of the year. Shares have risen by more than 70 percent since September, but fell 1 percent on Wednesday.
Boeing CEO Dave Calhoun told analysts the company 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.”
Photo: AP
Those stoppages are lowering, but “not where they need to be,” Calhoun said.
Boeing chief financial officer Brian West said the company is increasing its abnormal accounting estimate by about US$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 aircraft per month later this year.
Boeing said that it plans this year to this year deliver up to 450 737 MAX narrow-body aircraft and 70 to 80 wide-body 787 Dreamliners.
The company said it expects to generate US$3 billion to US$5 billion in free cash flow this year.
Those numbers do not include the much-anticipated restart of Boeing jetliner deliveries to China. Calhoun declined to comment on when Chinese airlines might begin accepting aircraft from Boeing.
“Within China, they need the MAX to fly to satisfy those demands,” Calhoun said, adding that the potential opening of the Chinese market is a “serious bump” for the entire aviation industry.
Boeing previously expressed interest in remarketing a portion of the Chinese 737 MAX planes, but Calhoun on Wednesday said that Boeing would “pause” its efforts “so that we can discern what China wants to do.”
China Southern Airlines (中國南方航空) 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 intended for Chinese customers.
The supply chain issues come as Boeing is trying to ramp up production.
Boeing last year was “showing some significant progress in key areas, although the reported financial results were mixed,” Third Bridge analyst Peter McNally said.
Boeing said net losses rose to US$5 billion for last year from US$4.3 billion in 2021, while losses from operations rose to US$3.5 billion last year from US$2.9 billion.
Boeing generated US$3.1 billion in free cash flow in the final quarter of last year. It had forecast about US$2.5 billion in free cash flow for the fourth quarter. Boeing reported US$2.3 billion for the full year.
Boeing reported fourth-quarter revenue of US$20 billion, up from US$14.79 billion last year, and a loss per share of US$1.75. Boeing had been expected to report US$20.38 billion in revenue in the quarter and a gain of US$0.26 a share, Refinitiv data showed.
While supply chain bottlenecks could hamper for the aerospace industry, McNally said jetliner demand remains strong, and Boeing has ramped up deliveries.
Boeing last month won approval from the US Congress to lift a deadline imposing a new safety standard for modern cockpit alerts for the MAX 7 and MAX 10.
The MAX 7 could have its first flights this year, and the MAX 10 “probably” next year, Calhoun said.
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