Boeing reports higher third-quarter revenue but remains loss-making

Revenue rises while Boeing posts a net loss

Boeing reported third-quarter revenue of $24.188 billion, up 4% from $23.270 billion a year earlier, the company said in its results released October 27. The increase primarily reflected higher defense and services volume and a less favorable commercial-aircraft delivery mix.

The company reported GAAP earnings from operations of $354 million and a 1.5% operating margin, compared with a $4.781 billion operating loss and negative 20.5% margin in the prior-year quarter. It nevertheless recorded a GAAP net loss of $116 million, or $0.26 per diluted share. Core loss per share was $0.34 on a non-GAAP basis.

Cash generation improved as backlog reached a record

Operating cash flow rose to $1.496 billion in the third quarter, up from $1.123 billion a year earlier. Boeing attributed the result partly to working-capital timing, offset by approximately $700 million in Department of Justice settlement payments. Free cash flow, a non-GAAP measure, was $464 million.

Cash and marketable securities totaled $20.7 billion at quarter-end, compared with $20.0 billion at the beginning of the period. Consolidated debt was unchanged at $45.9 billion. Boeing also retained $10 billion in undrawn credit facilities.

Total company backlog grew to a record $745 billion, including more than 6,300 commercial airplanes.

Commercial deliveries increased while segment revenue fell

Boeing delivered 161 commercial airplanes in the quarter, compared with 160 in the year-earlier period. Commercial Airplanes revenue declined 3% to $10.720 billion, while the segment posted a $697 million operating loss.

The company’s results release said quarterly revenue growth was driven primarily by higher defense and services volume, even as commercial-aircraft revenue reflected a less favorable delivery mix. Detailed segment information beyond the figures disclosed in the supplied report was not available.

Certification and Navy fighter selection marked key milestones

Boeing said the 737-7 achieved amended type certification from the Federal Aviation Administration, and that the 737-10 achieved amended type certification in October. The company also reported that the U.S. Navy selected Boeing to design, build and deliver the F/A-XX next-generation fighter aircraft.

President and chief executive officer Kelly Ortberg said the certification and Navy selection were important steps in the company’s progress but added that Boeing was not finished with its work. He said the company remained focused on safety, quality and disciplined execution.

Pre-release analyst focus centered on delivery and cash flow

Before the results were released, analysts were focused on aircraft deliveries, production and quality updates, free-cash-flow guidance, certifications and potential contract updates. Pre-release estimates cited a $0.26 loss per share and revenue of about $23.95 billion, compared with the $24.188 billion and $0.26 GAAP loss per share Boeing ultimately reported.

Those estimates reflected expectations rather than confirmed outcomes. The supplied reporting did not provide the amount of Boeing’s post-results share-price reaction or establish that any market move was caused by the earnings release.