Boeing (BA) Q2 2022 earnings are below estimates

An aerial view of Boeing 777X and Boeing 737 MAX 10 aircraft parked at King-Boeing Field County International Airport in Seattle, Washington on June 1, 2022.

Lindsey Wasson | Reuters

Boeing Wednesday blocked by its return to free cash flow forecast this year as it prepares to resume deliveries of its 787 Dreamliner jets after manufacturing defects interrupted deliveries for much of the past two years.

The company’s second-quarter results were below analysts’ estimates. The weakness of its defense unit weighed on results, but was partly offset 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 revenues rose 3% to more than $6.2 billion.

The company just won large orders at the Farnborough Air Show like those of 100 737 Max 10 from Delta Airlines. Customers of Boeing and its competitor Airbus have benefited from a rebound in travel after demand for flights plummeted during the pandemic.

Here’s how the company performed against analyst estimates compiled by Refinitiv:

  • Adjusted loss per share: 37 cents against an expected loss of 14 cents.
  • Revenue: $16.68 billion vs $17.57 billion expected.

Boeing grew to operating cash flow of $81 million in the quarter after burning $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% compared to the second quarter of 2021.

CEO Dave Calhoun said earlier this month that the company produces an average of 31,737 Max jetliners each month. He said the company wouldn’t increase production too quickly due to supply chain and labor constraints. Its 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 due to production defects.

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 buildup of inventory. Boeing recorded $283 million in the second quarter.

A return of 787 deliveries is essential for Boeing because customers pay most of the price of an aircraft when they receive the planes.

Revenue for the company’s defense unit fell 10% from a year ago and the company took a $147 million charge on its MQ-25 unmanned tanker due to higher costs .

Boeing executives will discuss the results with analysts at 10:30 a.m. Wednesday, when they likely face questions about the 737 Max’s return to flights in China, the plane’s key customer, the 777X’s schedule and its forecast. cash flow for this year and next year.

Analysts are also likely to ask Boeing executives to clarify when they hope to achieve U.S. certification for the 737 Max 10, the largest in the Max family.

Boeing shares are down more than 22% so far this year. The shares rose more than 2% in premarket trading after the earnings release.

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