Boeing posts a loss following problems with defence development programmes

US aircraft maker records net loss of more than $3.3bn in three months to September 30

Boeing’s revenue climbed 4.4 per cent annually to almost $16 billion in the third quarter. AP
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Boeing posted a quarterly net loss of more than $3.3 billion in three months to September 30, from $132 million in the same period last year, driven by a drop in the defence, space and security business division.

The company’s loss per share in the third quarter expanded to $5.49 from $0.19 in the same period last year. Total company backlog at quarter-end stood at $381bn.

The US plane maker’s revenue jumped 4.4 per cent annually to almost $16bn, the company said in a statement.

"We continue to make important strides in our turnaround and remain focused on our performance," said Dave Calhoun, Boeing president and chief executive.

"We generated strong cash in the quarter and are on a solid path to achieving positive free cash flow for 2022. At the same time, revenue and earnings were significantly impacted by losses on our fixed-price defence development programmes,” Mr Calhoun said.

 Dave Calhoun, Boeing president and chief executive. Bloomberg

The company’s stock dropped almost 1 per cent in pre-market trading to $145.25 a share.

The operating cash flow improved to $3.2bn in the quarter, reflecting higher commercial deliveries, favourable receipt timing and a tax refund, the company said.

The commercial planes division’s third-quarter revenue increased 40 per cent yearly to $6.3bn, driven by the resumption of 787 deliveries and higher 737 deliveries.

The company said it resumed 787 deliveries in late August, following “comprehensive reviews” to ensure each plane meets the highest standards. The programme is producing at a low rate with an expected gradual return to five per month over time.

During the quarter, the company secured net orders for 227 aircraft — including 167 737s, 27 767s, 18 777s and 15 787 planes.

Commercial airplanes delivered 112 airplanes during the quarter and backlog included over 4,300 airplanes valued at $307bn.

Revenue from defence, space and security unit dropped 20 per cent to $5.3bn in the third quarter. It was mainly due to $2.8bn of losses on certain fixed-price development programmes, driven by higher estimated manufacturing and supply chain costs, and technical challenges, Boeing said.

During the July-September period, Boeing’s defence, space and security arm delivered 34 aircraft and two satellites, including the first four MH-139A Grey Wolf helicopters to the US Air Force. Backlog at the unit stood at $55bn, of which 31 per cent represents orders from customers outside the US.

Boeing's commercial airplanes division’s third-quarter revenue increased 40 per cent yearly to $6.3 billion, driven by the resumption of 787 deliveries and higher 737 deliveries. Reuters

Global services third-quarter revenue increased 5 per cent to $4.4bn.

“We remain in a challenging environment and have more work ahead to drive stability, improve our performance and ensure we are consistently delivering on our commitments. Despite the challenges, I am proud of our team and the progress we have made to strengthen our company,” Mr Calhoun said.

The company’s cash and investments in marketable securities increased to $14.3bn, compared to $11.4bn at the beginning of September quarter. The company said it has access to credit facilities of $12bn, which remain undrawn.

Updated: October 27, 2022, 5:39 AM
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