Boeing sticks to its 2022 cash flow forecast, prepares to resume Dreamliner deliveries

Boeing on Wednesday stuck to its forecast for a return to free cash flow this year as it prepares to resume deliveries of its 787 Dreamliner aircraft after manufacturing defects that have halted deliveries for most of the past two years.

The company’s second-quarter results were below analyst estimates. Weakness in its defensive unit dragged back results, but was partially offset by the strength of the commercial aircraft unit. Aircraft shipments rose to 121 in the second quarter from 79 a year ago, while commercial aircraft revenue jumped 3% to more than $6.2 billion.

The airline is recent to win high-profile orders at the UK’s Farnborough Air Show such as those for Delta Air Lines’ 100737 Max 10s. Customers of rival Boeing and Airbus have benefited from a travel revival after the demand for flights declined during the Covid pandemic.

Here’s how the company performed compared to analyst estimates that Refinitiv complied with:

  • Adjusted loss per share: 37 cents versus an expected loss of 14 cents.
  • he won: $16.68 billion versus the $17.57 billion forecast.

Boeing turned to operating cash flow of $81 million in the quarter after burning $483 million in the same period last year. The Arlington, Virginia-based company reported net income of $160 million, down 72% from a year earlier on revenue of $16.68 billion, down 2% from the second quarter of 2021.

CEO Dave Calhoun said earlier this month that the company produces an average of 31,737 Max jets each month. He said Boeing would not raise production too quickly due to supply chain and labor constraints. Rival Airbus has voiced similar concerns.

“Even with high demand, we won’t chase production rates or push our system too quickly,” Calhoun said in a task force memo on Wednesday. “With safety and quality at the fore, we will prioritize stability and predictability.”

He also confirmed that Boeing is “in the final stages” of preparations to resume deliveries of its 787 Dreamliner wide-body aircraft, which have been grounded for more than a year due to production defects.

In January, Boeing said the issues would cost it $5.5 billion, including $2 billion in irregular manufacturing costs with production restarts to avoid inventory buildup. The company posted $283 million of that in the second quarter.

The return of the 787 deliveries is key for Boeing because customers pay the bulk of the price of the plane when they receive the planes, though the company has warned that it will likely have to compensate airlines for delivery delays.

In a call with analysts on Wednesday, Boeing’s CEO said the company is working to have its Max 7 and Max 10 models, the smallest and largest in the family, respectively, certified by the Federal Aviation Administration (FAA) by the end of the year. Delays without exceptions could force Boeing to add new cockpit alert systems under legislation that tightened aircraft certification requirements after fatal Max crashes in 2018 and 2019.

The company’s defense unit revenue was down 10% from last year, and Boeing took $147 million on its unmanned MQ-25 refueling plant due to higher costs.

The company also received a $93 million Starliner astronaut capsule fee, bringing the program’s overrun costs to $688 million so far. Boeing successfully completed its second Starliner uncrewed flight test in May, and is now preparing for its first launch with astronauts next.

Boeing shares are down more than 22% so far this year to Tuesday’s close. The stock rose more than 1% in morning trading on Wednesday after the results were announced.

CNBC Michael Sheetz Contribute to this report.

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