Deck Clearing Quarter… Again: Boeing Stock Tumbles to 18-Month Lows After Results, Analyst Not Surprised
2022.04.27 17:26
Deck Clearing Quarter… Again: Boeing (BA) Stock Tumbles to 18-Month Lows After Results, Analyst Not Surprised
Shares of Boeing (NYSE:BA) are down more than 4% in premarket trading after the planemaker reported a negative adjusted free cash flow of $3.57 billion in Q1, while analysts were looking for $3.23 billion.
Revenue came in at $13.99 billion, missing the consensus estimates of $15.94 billion. The company reported a core loss per share of $2.75, compared to a loss per share of $1.53 in the same period last year.
The Commercial Airplanes segment reported a revenue of $4.16 billion, down 2.5% YoY and below the estimated $4.78 billion. Defense, Space & Security generated $5.48 billion in revenue, down 24% YoY and short of the consensus estimates of $6.84 billion.
Revenue from Global Services totaled $4.31 billion, up 15% YoY and above the expected $4.19 billion. Backlog totaled $371 billion in the quarter.
On a more positive note, Boeing said it is on track to generate positive cash flow for 2022.
“Despite the pressures on our defense and commercial development programs, we remain on track to generate positive cash flow for 2022, and we’re focused on our performance as we work through certification requirements and mature several key programs to production,” BA said.
Boeing also said it was suspending production of its 777x jet through 2023 as a result of issues related to certification and poor demand for this model. The company also declared $1.5 billion in costs related to the program.
The company also noted a delay in the delivery of the first 777x jet to 2025, but added it remains optimistic about the program. The halt of 777-9 production will allow the company to increase its 777 freighter capacity starting in late 2023, CEO Dave Calhoun said.
Cowen analyst Cai von Rumohr said investors witnessed yet another deck clearing quarter.
“Bigger than expected loss and cash outflow reflected multiple charges and continuing operational challenges – neither a surprise. Investor reaction apt to be neutral/negative barring upbeat color on the call,” the analyst said in a client note.
Goldman Sachs analyst Noah Poponak reflected with the following comments:
“Boeing provided a number of positive updates relative to concerned expectations including affirming MAX rate 31 in 2Q22, submission of the 787 certification plan to the FAA with no change in cost expectations, and reiterating an outlook for positive free cash flow this year… Results remain highly disrupted by low production rates and abnormal costs, and BA took large charges in Defense; however the update on milestones that impact the forward was better than we expected,” Poponak said in a client note.
By Senad Karaahmetovic
