Boeing Misses Q3 Analyst Earnings Target, But 737 Production Target Takes Flight

Boeing Co BA reported third-quarter revenue growth of 8.1% year-over-year to $15.28 billion, missing the consensus of $16.04 billion.

Revenue by segments: Commercial Airplanes $4.46 billion (+24% Y/Y), Defense, Space & Security $6.62 billion (-3% Y/Y), and Global Services $4.22 billion (+14% Y/Y).

Adjusted EPS improved to $(0.60) from $(1.39) in 3Q20, reflecting higher commercial volume, missing the consensus of $(0.21).

The adjusted operating margin recovered to 0.4% compared to (5.3%) a year ago. GAAP operating margin was 2.2% versus (2.8)% last year. Boeing's operating cash flow burn improved to $262 million in Q3 compared to a cash burn of $4.82 billion due to higher commercial deliveries, higher-order receipts, and lower expenditures.

The company delivered 241 commercial airplanes year-to-date, with 85 delivered this quarter, compared to 28 in 3Q20. 

At the end of Q3, Boeing's backlog was $367 billion, with Commercial Airplanes backlog at $290 billion and added 93 net orders. Commercial Airplanes secured orders for 70 737 MAX, 24 freighters, and 12 787 airplanes. 

Boeing held cash and equivalents of $20.0 billion as of September 2021, versus $21.3 billion at the beginning of the quarter, primarily driven by debt repayment and operating cash outflows. Debt was $62.4 billion, down from $63.6 billion at the beginning of the quarter due to the repayment of maturing debt.

"Commercial market demand continues to gain traction with broad-based vaccine distribution and border protocols beginning to open. Going forward, supply chain capacity and global trade will be key drivers of our industry and the broader economy's recovery," noted Boeing President and CEO David Calhoun.

The company said its 737 Program is currently producing 19 aircraft per month, and it continues to progress toward a production rate Of 31 per Month in early 2022.

Price Action: BA shares are trading higher by 1.04% at $212 during the premarket session on Wednesday.