Earnings Results: Boeing stock slips on widening Q3 loss and revenue miss amid ‘challenging environment’

United States

Boeing Co. reported a widening third-quarter loss and revenue that missed analysts’ estimates by almost $ 2 billion early Wednesday amid what the company’s CEO described as a “challenging environment.”

Boeing’s BA, +3.24% stock was down 0.68% before market open. The aircraft maker’s stock ended Tuesday’s session up 3.24%, outpacing the S&P 500 Index’s SPX, +1.63% gain of 1.63%.

Boeing reported a $ 5.49 loss per share, compared with a loss of 19 cents a share in the same period last year. Analysts surveyed by FactSet were looking for earnings of 13 cents a share. The company’s core loss per share, which excludes a FAS/CAS service cost adjustment, was $ 6.18. In its earnings release Boeing said that the/CAS service cost adjustment represents the difference between the Financial Accounting Standards (FAS) pension and postretirement service costs calculated under GAAP and costs allocated to the business segments.

The company’s third-quarter revenue was $ 15.956 billion, compared with $ 15.278 billion in the year-ago quarter. Analysts surveyed by FactSet were looking for sales of $ 17.911 billion.

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Revenue and earnings were significantly impacted by losses on Boeing’s fixed-price defense development programs, according to the company’s CEO Dave Calhoun. “We’re squarely focused on maturing these programs, mitigating risks and delivering for our customers and their important missions,” he said, in a statement. “We remain in a challenging environment and have more work ahead to drive stability, improve our performance and ensure we’re consistently delivering on our commitments.”

The company’s Defense, Space, and Security revenue was $ 5.307 billion, compared with $ 6.617 billion in the same period last year. Defense, Space and Security operating margin was impacted by $ 2.8 billion of losses on certain fixed-price development programs. Boeing said this was driven by higher estimated manufacturing and supply chain costs, as well as technical challenges.

Commercial Airplanes revenue increased to $ 6.263 billion, compared with $ 4,459 in the same period last year, boosted by the resumption of 787 deliveries and higher 737 deliveries.

Boeing generated operating cash flow of $ 3.19 billion during the quarter. “We continue to make important strides in our turnaround and remain focused on our performance,” said Calhoun. “We generated strong cash in the quarter and are on a solid path to achieving positive free cash flow for 2022.”

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The company said it had a total backlog of $ 381 billion at the end of the quarter, including over 4,300 commercial airplanes.

Boeing’s stock has fallen 27.16% this year, compared with the S&P 500 Index’s decline of 19.03% and the Dow Jones Industrial Average’s DJIA, +1.07% fall of 12%.