seems to have turned the cash flow corner. That’s good news, but the company still failed to turn a profit as earnings once again missed expectations, sending shares lower in Wednesday trading.
It reported a fourth-quarter loss of $1.75 on sales of $20 billion per share on Wednesday morning.
Wall Street was looking for earnings per share of 17 cents on Boeing’s $20 billion in sales. The profit shortfall was primarily due to special items totaling nearly $800 million, up nearly $550 million from the fourth quarter of 2021. CFO Brian West highlighted “abnormal costs” during the company’s earnings conference call, including ongoing supply chain issues.
The earnings report is “still a mess,” Vertical Research Partners analyst Rob Stallard wrote in a report Wednesday. Its commercial aircraft, defense and lending divisions missed estimates for its operating profit. Quarterly free cash flow, however, of $3.1 billion, was in line with his forecast, and Stallard noted that Boeing paid down about $3 billion in debt in the quarter. He rates the stock a Hold and has a $175 price objective on Boeing stock.
Q4 is the second consecutive quarter that Boeing has generated positive free cash flow.
Before today’s results, Boeing had generated positive free cash flow in only two quarters of 2014 after the 737 MAX debacle and the start of the Covid-19 pandemic. Aircraft deliveries plummeted as airlines struggled to stay afloat amid falling demand for air travel.
Going forward, Boeing expects to generate $3-5 billion in free cash flow through 2023. Wall Street is currently forecasting $4.2 billion. Analysts expect the company to deliver roughly 600 aircraft, up from 480 in 2022.
Many of those deliveries will end up in China, which recently began flying the 737 MAX again. Boeing ended the year with an inventory of about 250 MAX aircraft. About 140 of those are for Chinese customers, according to the company.
According to the results of afternoon trading, Boeing’s stock decreased by about 2.4%. The S&P 500 and Dow Jones Industrial Average were down about 1.1% and 0.9%, respectively.
Boeing shares are up about 11% this year and about 48% over the past three months in Wednesday trading. The S&P 500 is up about 5% this year and about 6% over the past three months. The year-over-year and three-month changes in the Dow Jones Industrial Average were 2% and 7%, respectively.
Email Al Root at [email protected]