appears to have turned the cash flow corner. That’s good news, but the company still couldn’t turn a profit, as earnings missed expectations once again, which sent the stock lower in Wednesday trading.
(ticker: BA), Wednesday morning, reported a fourth-quarter loss of $1.75 a share from $20 billion in sales.
Wall Street was looking for earnings per share of 17 cents from sales of $20 billion for Boeing. The earnings shortfall was driven mainly by special items totaling almost $800 million, up about $550 million compared with the fourth quarter of 2021. CFO Brian West highlighted “abnormal costs” on the company’s earnings conference call, including continuing supply chain problems.
The profit and loss statement is “still a mess” wrote Vertical Research Partners analyst Rob Stallard in a Wednesday report. The commercial aircraft, defense and lending units all missed their operating profit estimates. Quarterly free cash flow, however, at $3.1 billion, was in line with his forecast, and Stallard noted that Boeing paid down about $3 billion of debt in the quarter. He rates shares Hold and has a $175 price target for Boeing stock.
Q4 is the second consecutive quarter Boeing has generated positive free cash flow.
Before today’s results, Boeing had generated positive free cash flow in only two quarters out of the past 14, following the onset of the 737 MAX debacle and the Covid-19 pandemic. Plane deliveries plummeted as airlines struggled to stay afloat amid reduced demand for air travel.
Looking ahead, Boeing expects to generate between $3 billion and $5 billion in free cash flow during 2023. Wall Street is currently projecting $4.2 billion. Analysts expect the company to deliver roughly 600 planes, up from 480 delivered in 2022.
A lot of those deliveries will end up in China which just recently started flying the 737 MAX again. Boeing ended the year with about 250 MAX jets in inventory. About 140 of those are destined for Chinese customers, according to the company.
Boeing stock is down about 2.4% in midday trading. The S&P 500 and Dow Jones Industrial Average are off about 1.1% and 0.9%, respectively.
Coming into Wednesday trading, Boeing stock was up about 11% this year and up about 48% over the past three months. The S&P 500 was up about 5% so far this year and up about 6% over the past three months. The year-to-date and three-month changes in the Dow Jones Industrial Average were 2% and 7%, respectively.
Write to Al Root at email@example.com