Updated: Nov 3
The North American aerospace giant Boeing, released its results for the third quarter of 2022 and highlights that it is the fifth consecutive quarter with losses, although due to different factors. With the resumption of deliveries of the Boeing 737 MAX and the Boeing 787 Dreamliner, the commercial aircraft business begins to improve, but now it was the defense programs that showed losses.
In the July-September quarter, Boeing had revenues of $15,956 million dollars (mdd), which is 4% higher than the same period in 2021, but in the accumulated 9 months of the year they reach $46,628 million dollars, which is 1.9% less than the Cumulative 2021. Loss for the quarter was $2.799 million compared to profit of $329 million for the third quarter of 2021, leading to a loss per share of $5.49.
The good news is that the cash flow did improve thanks to the aircraft deliveries that have been made, so there was $3.190 million dollars of cash flow, compared to the $262 million of negative flow last year. The accumulated losses in the year are $3,194 million dollars, which highlights that the third quarter is the one that has most affected the company's profits.
During the quarter, Boeing delivered 112 aircraft, 32% more than the 85 in 2021; the accumulated during 2022 has been 328 aircraft against 241 that were delivered last year. The good news in this section was that the FAA authorized the restart of deliveries of the Boeing 787 that had been stopped for more than a year until the reviews of the problems found and the repairs of said problems were made, so in the following months there will be quite a few aircraft deliveries that are ready, which will also help cash flow and revenue.
Boeing is producing about one and a half 787s a month but they hope to pick up the pace of 5 a month next year and then it will depend on demand. From the 737 MAX, 31 monthly were reached and it has not been possible to grow due to the restrictions of the suppliers, especially due to the shortage of engines.
New aircraft orders in the quarter were for 227 units, including 167 737s, 27 767s, 18 777s and 15 787s. Regarding the legendary 747 “Jumbo Jet”, the last aircraft to be manufactured is in the final phase of production, which will be delivered towards the end of the year, thus closing the cycle of this aircraft after more than 50 years.
It should be noted that versions of the 737 MAX 7 and 10 still have the certification problem that, if not achieved this year, would force them to create a new alert system for the crew. Boeing asked Congress for an extension in the term to be able to certify them as they are, and if not obtained, the Director General, David Calhoun, again mentioned their cancellation before having to invest in the new alert system. We'll see what happens.
Now problems in Defense and Space
Regarding the Defense, Space and Security programs, despite revenues of $5,307 million dollars, there was a loss of $2,798 million dollars, which is the one with the greatest impact globally in the quarter. This was due to some programs with fixed development costs that were impacted by higher than expected costs, in the KC-46A, VC-25B, MQ-25 and T-7A.
In short, while things are looking up for Boeing, there are still a lot of hurdles to overcome to get back to sustained profitability and to be able to invest in new programs that we know are urgent for them.
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