Boeing's Q3 Loss Narrows, Supplier Issue Impacts Near-Term Deliveries And Production Plans For 737

Boeing Co BA shares are up Wednesday morning after the company reported third-quarter FY23 results.

The company reported a third-quarter revenue increase of 13% year-over-year to $18.10 billion, beating the consensus of $16.58 billion. Revenue increase reflects 105 commercial deliveries in the quarter.

Adjusted loss per share contracted to $(3.26) from $(6.18) in 3Q22, missing the consensus of $(2.96).

BA’s loss from operations for the quarter reduced to $808 million, compared to a loss of $2.79 billion a year ago. Adjusted operating loss totaled $1.09 billion vs. $3.07 billion in 3Q22.

Operating cash flow for the quarter totaled $22 million, compared to 3.19 billion in 3Q22; Free cash flow loss was $310 million.

Also Read: Boeing Speeds Up Delivery Of GPS-Guidance Bomb Kits To Israel: Report

Commercial Airplanes revenue increased by 25% Y/Y to $7.88 billion, and deliveries decreased by 6%. During the quarter, Commercial Airplanes booked 398 net orders, and the backlog included over 5,100 airplanes valued at $392 billion.

Defense, Space & Security revenue increased 3% Y/Y at $5.48 billion. The backlog was $58 billion, of which 29% represents orders from customers outside the U.S..

Global Services revenue grew by 9% Y/Y to $4.81 billion. The operating margin contracted 20 bps to 16.3%, reflecting higher commercial volume and mix.

The company held cash and equivalents of $6.81 billion at the end of the quarter. The total company backlog was $469.18 billion.

Boeing identified a supplier issue with certain 737 airplanes’ aft pressure bulkhead section during the quarter. This will impact near-term deliveries and production, leading the company to adjust its delivery expectations for the year to 375-400 airplanes.

The 787 program increased production to four per month with plans to ramp to five per month in late 2023 and 10 per month in the 2025/2026 timeframe.

“We continue to progress in our recovery and despite near-term challenges, we remain on track to meet the financial goals we set for this year and for the long term,” commented Dave Calhoun, Boeing president and chief executive officer.

FY23 Outlook: Boeing reaffirmed its outlook of $3 billion - $5 billion in adjusted free cash flow and $4.5 billion - $6.5 billion in operating cash flow.

Price Action: BA shares are trading higher by 3.20% at $188.20 premarket on Wednesday.