Boeing (NYSE:BA)'s third-quarter results, released today, revealed a reduced loss per share of $3.26, down from $6.18 in the same period last year, beating the anticipated loss per share of $3.18. The company's revenues also increased by 13% year-on-year to reach $18.1 billion, surpassing the predicted $18 billion. Despite encountering a "supplier non-conformance" issue on the aft pressure bulkhead section of certain 737 planes, which poses no safety risk but will hinder near-term production and deliveries, Boeing maintains its commitment to its financial targets.
The aircraft manufacturer reaffirmed its full-year 2023 operating and adjusted free cash flow estimates of $4.5-$6.5 billion and $3-$5 billion, respectively. Boeing's Q3 2023 results also reiterated its guidance of $6.5 billion in operating cash flow and $5.0 billion in free cash flow, with an expected delivery of 70-80 787s and 375-400 737s this year.
The production rate for the 787 is transitioning to five per month, while the 737 is projected to reach 38 per month by the end of the year. Boeing also plans to increase 737 deliveries to 50 per month by 2025-2026.
Boeing's Q3 revenue was bolstered by the delivery of 105 commercial airplanes and a total backlog of $469 billion, including over 5,100 commercial airplanes. The Commercial Airplanes segment saw increased revenue due to higher 787 deliveries but also experienced lower 737 deliveries and abnormal costs due to supplier non-conformance.
Despite unfavorable performance in defense and lower 737 deliveries affecting results, Boeing CEO Dave Calhoun confirmed that the company remains on track to meet its financial goals. Cash and investments totaled $13.4 billion, with access to undrawn credit facilities of $10.0 billion. Boeing also booked orders for 150 737 MAX 10 airplanes for Ryanair (LON:0RYA).
The Defense, Space & Security segment reported a Q3 revenue of $5.5 billion with an operating margin of (16.9) percent due to a loss on the VC-25B program and losses on a satellite contract. Meanwhile, the Global Services segment reported a Q3 revenue of $4.8 billion and an operating margin of 16.3 percent, reflecting higher commercial volume and mix, and signed a digital maintenance solution agreement with Philippine Airlines.
Despite these challenges, analysts continue to uphold a Moderate Buy rating for BA stock, indicating cautious optimism about Boeing's future performance.
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