Boeing Reports $149 Million Loss as Defense Charges Pile Up
Deliveries and orders for jetliners rise; aerospace company’s sales and profit beat analysts’ expectations Boeing employees assembled 787s in North Charleston, S.C., earlier this year. Photo: POOL/REUTERS By Doug Cameron July 26, 2023 7:56 am ET Boeing reported a small second-quarter loss as more charges in its defense business outweighed the benefits of rising jetliner orders and deliveries. The aerospace giant said it is increasing jetliner production as planned while reducing its debt. Boeing said it still plans to deliver as many as 450 of its 737 MAX aircraft this year and up to 80 787 Dreamliners. What are the main takeaways from the quarter? Boeing beat expectations for sales, profit and free cash flow in the quarter and kept full-year and medium-t
Boeing employees assembled 787s in North Charleston, S.C., earlier this year.
Photo: POOL/REUTERS
Boeing reported a small second-quarter loss as more charges in its defense business outweighed the benefits of rising jetliner orders and deliveries.
The aerospace giant said it is increasing jetliner production as planned while reducing its debt. Boeing said it still plans to deliver as many as 450 of its 737 MAX aircraft this year and up to 80 787 Dreamliners.
What are the main takeaways from the quarter?
- Boeing beat expectations for sales, profit and free cash flow in the quarter and kept full-year and medium-term financial guidance unchanged.
- The company recorded more charges on troubled defense programs, with another $514 million in the latest quarter.
- Boeing is moving toward producing 38 of its 737 MAX jetliners a month, a key milestone to satisfy demand and customers who have faced delayed deliveries.
What drove the charges this quarter?
- The latest delay to the first crewed mission for its Starliner space taxi triggered another $257 million charge.
- The new T-7 Red Hawk trainer jet and MQ-25, a refueling drone, are delayed because of technical and supply-chain issues, adding another $257 million in charges.
How is the defense business doing?
- Boeing had a good quarter for international orders, especially for its helicopters.
- It failed to honor last year’s pledge to avoid further charges on troubled programs that have left the defense unit unprofitable.
How were the numbers?
- The net loss in the quarter ended June 30 of $149 million compared with a $160 million profit in the same period last year, better than expected among analysts polled by FactSet.
- Sales in the quarter rose 18% to $19.8 billion, ahead of expectations, helped by its services arm as global airline flying moves toward 95% of prepandemic levels.
- Free cash flow rose to $2.6 billion from a drain of $182 million a year earlier. It is a crucial metric for investors that reflects money left over after expenses and investment spending. Boeing still expects to deliver between $3 billion and $5 billion in free cash in 2023.
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Write to Doug Cameron at [email protected]
U.S. plane maker Boeing and European rival Airbus collectively secured over 1,000 firm orders at this year’s Paris Air Show. WSJ’s George Downs explains what these orders can tell us about the state of the duopoly, and the health of the aviation industry. Photo: George Downs
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