Boeing (BA) reported better-than-expected fourth-quarter results, as the aircraft maker continues to deal with the fallout from the Alaska Airlines 737 Max 9 crash, in which a door “plug” blew off mid-flight. Outlook for 2024 has been suspended. In early January.
Boeing reported revenue of $22.02 billion in the quarter, compared to expectations of $21.07 billion, according to Bloomberg consensus estimates. Boeing's fourth-quarter commercial revenue came in at $10.48 billion, compared to expectations of $10.04 billion. In terms of profitability, Boeing reported an adjusted loss per share (or “core” as Boeing calls it) of $0.47. In comparison, his estimated loss was $0.76.
Boeing reported operating cash flow of $3.38 billion and core operating margin of 0.4%, compared with a -3.2% profit margin last year.
However, what concerns investors is the suspension of Boeing's forward guidance.
In a message to employees, Boeing CEO Dave Calhoun said, “While we often share and update financial and operational goals at this time of year, now is not the time to do so.'' No,” he said. “We remain focused solely on our next aircraft, while doing everything possible to support our customers, follow the instructions of our regulators, and ensure the highest standards of safety and quality in all our activities. Ultimately, that's what drives our performance.”
For example, Boeing's free cash flow forecast for 2023 was $3 billion to $5 billion, and its operating cash flow forecast was $4.5 billion to $6.5 billion. Boeing declined to provide a 2024 update on these projections.
Wall Street wasn't too worried about the lack of guidance, with Boeing shares up more than 6% in early trading.
“The fact that there is no guide here is not really a suspension,” Robert Spingarn, managing director at Melius Research, said in an interview with Yahoo Finance. “It's just a postponement, so to speak, because of the uncertainty.”
Regarding production guidelines, Boeing has said it will limit production of the 737 Max to 38 planes per month until the FAA is satisfied with safety and quality. Last week, the FAA restricted production of the aircraft maker Max Jet.
Boeing announced that it will produce five 787 Dreamliners per month. The company plans to continue increasing production to 10 units per month. Production of the 777X widebody aircraft will continue as planned.
Earlier this month, Boeing reported net new orders for 1,314 aircraft in 2023, with 528 aircraft delivered in 2023, up from 480 deliveries and 774 net new orders in 2022.
Across its commercial jet portfolio, Boeing delivered 396 of the 737 jets last year, meeting its goal of at least 375 but falling short of its original goal of 400 to 450. Boeing also delivered 73 of the 787 Dreamliners in 2023, meeting its goal of 70 to 80. Finally, Boeing announced that its backlog now stands at 5,626 aircraft, down from 5,324.
As for the 737 Max 9 aircraft at the center of the Alaska Airlines debacle, the jets will return to service with Alaska Airlines and United Airlines after the FAA approves Boeing's inspection and maintenance plan. However, Boeing remains under regulatory scrutiny after the FAA halted Boeing's plans to increase production of the 737 Max 9 aircraft. The FAA also expanded its oversight of Boeing and its suppliers into the plane's production process, as well as its investigation into the aircraft's manufacturing. Compliance with manufacturing requirements.
Another jet in the Max family, the 737 Max 7, also suffered another setback this week. Last year, Boeing withdrew its request to the FAA to grant a safety exemption for the plane after the company reported problems with the plane's engine inlet de-icing system. Boeing now says it will devise an “engineering solution that will be completed during the certification process.” The 737 Max 7 is a smaller version of the Max airplane that has not yet been certified by the FAA.
The CEOs of United Airlines and Alaska Airlines, the two largest buyers of the 737 Max 9, have expressed frustration with Boeing's continued manufacturing problems with the planes.
“As we move forward, we will ensure we complete all actions to support our customers, work transparently with regulators and earn the trust of our stakeholders,” Boeing's Calhoun said in a statement.
Pras Subramanian is a reporter for Yahoo Finance.you can follow him twitter And even more Instagram.
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