Third Quarter 2023
- Reaffirm guidance: $4.5-$6.5 billion of operating cash flow and $3.0-$5.0 billion of free cash flow (non-GAAP)
- Still expect to deliver 70-80 787 and now expect to deliver 375-400 737 airplanes
- Now transitioning 787 to five per month; plan to complete 737 production transition to 38 per month by year-end
- Revenue of $18.1 billion reflecting 105 commercial deliveries
- Total company backlog of $469 billion, including over 5,100 commercial airplanes
| Table 1. Summary Financial Results | Third Quarter | Nine Months | ||||||||||||||||||||||||||||||||||||
| (Dollars in Millions, except per share data) | 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||||||||||||||||||||||||
| Revenues | $18,104 | $15,956 | 13 % | $55,776 | $46,628 | 20 % | ||||||||||||||||||||||||||||||||
| GAAP | ||||||||||||||||||||||||||||||||||||||
| Loss from operations | ($808) | ($2,792) | NM | ($1,056) | ($3,174) | NM | ||||||||||||||||||||||||||||||||
| Operating margins | (4.5) | % | (17.5) | % | NM | (1.9) | % | (6.8) | % | NM | ||||||||||||||||||||||||||||
| Net loss | ($1,638) | ($3,308) | NM | ($2,212) | ($4,390) | NM | ||||||||||||||||||||||||||||||||
| Loss per share | ($2.70) | ($5.49) | NM | ($3.64) | ($7.24) | NM | ||||||||||||||||||||||||||||||||
| Operating cash flow | $22 | $3,190 | NM | $2,579 | $55 | NM | ||||||||||||||||||||||||||||||||
| Non-GAAP* | ||||||||||||||||||||||||||||||||||||||
| Core operating loss | ($1,089) | ($3,071) | NM | ($1,919) | ($4,020) | NM | ||||||||||||||||||||||||||||||||
| Core operating margins | (6.0) | % | (19.2) | % | NM | (3.4) | % | (8.6) | % | NM | ||||||||||||||||||||||||||||
| Core loss per share | ($3.26) | ($6.18) | NM | ($5.35) | ($9.31) | NM | ||||||||||||||||||||||||||||||||
| *Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 5, “Non-GAAP Measures Disclosures.” |
The Boeing Company [NYSE: BA] recorded third quarter revenue of $18.1 billion, GAAP loss per share of ($2.70) and core loss per share (non-GAAP)* of ($3.26) (Table 1). Third quarter results were impacted by unfavorable defense performance and lower 737 deliveries. Boeing reported operating cash flow of $0.0 billion and free cash flow of ($0.3) billion (non-GAAP).
“We continue to progress in our recovery and despite near-term challenges, we remain on track to meet the financial goals we set for this year and for the long term,” said Dave Calhoun, Boeing president and chief executive officer. “We are focused on driving stability in our supply chain and improving operational performance as we steadily increase production rates to meet strong demand. The important work we’re doing to add rigor around our quality systems and build a culture of transparently bringing forward any issue, no matter the size, can bring short-term challenges – but it is how we set ourselves on the right course for our long-term future. Leading with safety, quality and transparency, we will continue to restore our operational and financial strength.”
| Table 2. Cash Flow | Third Quarter | Nine Months | ||||||||||||||||||||||||||||
| (Millions) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||
| Operating cash flow | $22 | $3,190 | $2,579 | $55 | ||||||||||||||||||||||||||
| Less additions to property, plant & equipment | ($332) | ($284) | ($1,096) | ($896) | ||||||||||||||||||||||||||
| Free cash flow* | ($310) | $2,906 | $1,483 | ($841) | ||||||||||||||||||||||||||
| *Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 5, “Non-GAAP Measures Disclosures.” |
Operating cash flow was $0.0 billion in the quarter reflecting less favorable receipt timing, including the absence of a prior year tax refund (Table 2).
| Table 3. Cash, Marketable Securities and Debt Balances | Quarter End | |||||||||||||
| (Billions) | Q3 23 | Q2 23 | ||||||||||||
| Cash | $6.8 | $7.3 | ||||||||||||
| Marketable securities1 | $6.6 | $6.5 | ||||||||||||
| Total | $13.4 | $13.8 | ||||||||||||
| Consolidated debt | $52.3 | $52.3 | ||||||||||||
| 1 Marketable securities consist primarily of time deposits due within one year classified as “short-term investments.” |
Cash and investments in marketable securities totaled $13.4 billion, compared to $13.8 billion at the beginning of the quarter (Table 3). The company has access to credit facilities of $10.0 billion, which remain undrawn.
Total company backlog at quarter end was $469 billion.
Segment Results
Commercial Airplanes
| Table 4. Commercial Airplanes | Third Quarter | Nine Months | ||||||||||||||||||||||||||||||||||||
| (Dollars in Millions) | 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||||||||||||||||||||||||
| Deliveries | 105 | 112 | (6) % | 371 | 328 | 13 % | ||||||||||||||||||||||||||||||||
| Revenues | $7,876 | $6,303 | 25 % | $23,420 | $16,755 | 40 % | ||||||||||||||||||||||||||||||||
| Loss from operations | ($678) | ($622) | NM | ($1,676) | ($1,738) | NM | ||||||||||||||||||||||||||||||||
| Operating margins | (8.6) | % | (9.9) | % | NM | (7.2) | % | (10.4) | % | NM | ||||||||||||||||||||||||||||
Commercial Airplanes third quarter revenue increased to $7.9 billion driven by higher 787 deliveries (Table 4). Operating margin of (8.6) percent also reflects lower 737 deliveries as well as abnormal costs and period expenses, including research and development.
On the 737 program, during the quarter a supplier non-conformance was identified on the aft pressure bulkhead section of certain 737 airplanes. This is not an immediate safety of flight issue and the in-service fleet can continue operating safely. Near-term deliveries and production will be impacted as the program performs necessary inspections and rework, and the company now expects to deliver 375-400 airplanes this year. On production, suppliers are continuing with planned rate increases, and the company expects to complete the final assembly transition to 38 per month by year-end, with plans to increase to 50 per month in the 2025/2026 timeframe. The estimated cost associated with performing the rework is immaterial and included in third quarter results.
The 787 program is now transitioning production to five per month and plans to increase to 10 per month in the 2025/2026 timeframe. The program still expects to deliver 70-80 airplanes this year.
During the quarter, Commercial Airplanes booked 398 net orders, including 150 737 MAX 10 airplanes for Ryanair, 50 787 airplanes for United Airlines, and 39 787 airplanes for Saudi Arabian Airlines. Commercial Airplanes delivered 105 airplanes during the quarter and backlog included over 5,100 airplanes valued at $392 billion.
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- Source: https://worldairlinenews.com/2023/10/25/boeing-reports-a-net-loss-of-1-6-billion-in-the-third-quarter/
