Here’s how Boeing’s accounts in the red beat expectations
Although with losses of $355 million and declining revenues, Boeing reports a better-than-expected first quarter of 2024. Facts, numbers and comments
Boeing's earnings beat Wall Street's expectations.
The US airline suffered losses of $355 million in the first quarter of 2024, largely due to the repercussions of the accident involving a 737 Max 9 from the Alaska Airlines fleet on January 5. This was announced by the company itself, which recorded an 8% drop in revenue compared to a year ago, a figure that was still slightly better than economists' expectations.
Additionally, Boeing burned through $3.9 billion in the first quarter, beating an earlier company forecast and Wall Street analysts' expectations for a cash burn of as much as $4.5 billion for the quarter.
Since the disastrous start to 2024 with the blowout of the door of the 737 Max 9 during Alaska Airlines Flight 1282, the American plane maker has been under scrutiny from authorities and is losing a lot of money and consumer trust in the meantime. The Federal Aviation Administration (FAA) has imposed a production cap on Boeing's top-selling 737 Max jets as well as requiring the manufacturer to develop a comprehensive plan to address "systemic quality control issues."
Boeing shares, which have fallen 35% year to date, rose 3.2% in early trading after the company reported a narrower loss and lower cash burn than analysts feared.
After the report, Boeing's outgoing CEO Dave Calhoun (who is set to step down later this year) told CNBC that a deal to acquire its key supplier Spirit AeroSystems is more than likely in the second quarter.
All the details.
REVENUES DROPPED IN THE FIRST QUARTER OF 2024
In the first quarter of 2024, revenues fell 8% to $16.569 billion, down from $17.92 billion a year earlier, due to fewer commercial aircraft deliveries: there were 83 in the quarter, down by 36% compared to 130 in the first three months of 2023.
However, the revenue figure still exceeded expectations by $16.23 billion.
As regards the different divisions, revenues of the commercial aircraft division recorded a decline of 31% to 4.653 billion dollars; for the defense and aerospace sector, revenues amounted to 6.95 billion (+6%); services generated revenues of 5.045 billion (+7%).
ACCOUNTS IN THE RED FOR BOEING
Boeing reported a loss of $355 million, improving from a loss of $423 million in the same period in 2023. Loss per share for the period was $0.56, versus $0.69 a year ago. Core loss per share narrowed to $1.13, versus -$1.27 a year ago and beating expectations of $1.76.
NEGATIVE CASH FLOW BUT BETTER THAN EXPECTED
Operating cash flow was negative $3.4 billion and free cash flow negative $3.9 billion, still better than analysts' estimate of $4.5 billion.
THE ORDER PORTFOLIO
Overall, the group's order book amounts to $529 billion and includes 5,600 commercial aircraft.
THE WORDS OF THE OUTGOING CEO
“In the short term we are in a difficult time,” outgoing CEO Dave Calhoun, who will leave the role at the end of the year, admitted in a message to employees before the conference.
“Our first quarter results reflect the immediate actions we took to slow 737 production and drive quality improvements,” Calhoun said. “We will take the time to strengthen our quality and safety management systems and this work will position us for a stronger and more stable future,” he added.
In the quarter in question, 83 commercial airplanes were delivered to customers, 36 percent fewer than a year ago, after quality control problems emerged on the 737 Max planes produced in Renton, Washington. Calhoun highlighted how the decline in production is linked precisely to the "significant progress" recorded in improving production quality, and said he was confident in Boeing's full recovery.
ANALYSTS COMMENT
“Well, it could have been worse. While the loss and cash outflow are not as severe as feared, the company is still clearly facing some serious challenges in the Commercial Aircraft division that will require some adjustment,” Vertical Research Partners analyst Robert Stallard said in a note, resume from Reuters .
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/ecco-come-i-conti-in-rosso-di-boeing-battono-le-attese/ on Thu, 25 Apr 2024 07:09:01 +0000.