Boeing's fourth-quarter results, reported early Wednesday, fell short of analyst expectations as the company just saw charges on its 787 Dreamliner and KC-46 programs. Boeing stock fell slightly early Wednesday.
Boeing reported a loss of $7.69 per share as revenue fell 3% to $14.79 billion. FactSet analysts had projected a loss of 36 cents per share on revenue of $16.54 billion.
The loss was largely due to Boeing taking a $3.5 billion pre-tax non-cash charge on the 787 Dreamliner program. The halt in deliveries amid discussions with regulators is "taking longer than previously expected," Boeing said in the earnings release. The company sees abnormal costs related to the 787 increasing to $2 billion, up from an estimate of $1 billion in Q3, with most of the cost incurred by the end of 2023.
Commercial revenue rose to $4.8 billion, helped by rising 737 deliveries. However, due to the 787 delays, the figure is below the $5.58 billion FactSet expected.
Boeing recorded 79 orders in Q4, for a total of 479 net orders on the year. It delivered 99 commercial jets in the fourth quarter.
It's been a year since the 737 Max has returned to service in the U.S. and Europe. But Chinese regulators, the first to ground the Max back in 2019, have been slow to recertify the aircraft. But on Jan. 9, a Hainan Airlines 737 Max flew from Taiyuan to Haikou, according to Chinese media reports. That would mark the first domestic Chinese 737 flight since the grounding in March 2019.
Boeing said that it was ready to start deliveries to China as soon as the first quarter.
Overall, carriers are eager to get their hands on more 737 Max jets. Alaskan Air, Southwest Airlines and Allegiant Air, owned by Allegiant Travel placed orders for the 737 Max aircraft during the quarter.
Boeing is currently producing 27 737 Max jets per month and plans to ramp up to 31 per month early this year. It has 335 737 Max airplanes in its inventory.
"Omicron has paused the industry recovery, but it has not changed the outlook for the industry," CEO Dave Calhoun said during the Q4 call. Boeing expects international travel to pick up in the spring and summer.
Free cash flow turned positive to $494 million from negative $4.27 billion in the year-ago quarter. The total company backlog was $377 billion at the end of the quarter.
Looking ahead, Boeing expects Q1 to be the year's weakest quarter for deliveries, revenue, earnings and cash flow.
Boeing's CFO Brian West said during the earnings call that the company is "confident that our free cash flow will improve in the second quarter, and will meaningfully accelerate in the back half of the year."
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On the defense and space side, revenue fell 14% to $5.86 billion. The Dow Jones aerospace giant recorded a $402 million pre-tax charge on the KC-46 tanker for the U.S. Air Force.
Currently, the KC-46 serves 70% of the missions targeted during its development, Calhoun said during the earnings call.
Still, the company has been investing in new technologies that could take flight later this decade. Earlier this month, Boeing said it would invest $450 million in Wisk Aero, an autonomous air taxi start-up. In June, Boeing conducted the first in-flight refueling tests of its MQ-25 refueling drone.
Calhoun defended Boeing's decision to invest in Wisk on the company's earnings call, even as the company faces issues with its 787 and multiple other charges.
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"The world wants autonomy and the world wants electric," he said. "Everything about this program we like. It's technically innovative and it will serve a niche we don't serve today."
Shares closed down 4.8% to 194.27 on the stock market today. Boeing stock is back below its down-trending 50-day moving average. Shares have been unable to muster a sustained campaign above that level of resistance since April last year.
But investors should keep an eye on Boeing stock as it's currently in a very long consolidation with a 278.67 buy point, according to MarketSmith analysis.
Follow Gillian Rich on Twitter for aviation news and more.
