Encouraging results observed in Boeing's Commercial Aerospace division, despite ongoing supply chain challenges.
Defense business shows negative margins due to cost overruns, with a notable charge of $514 million related to Starliner and other projects.
Boeing reports a Q2 free cash flow of $2.58 billion and an 18% rise in revenue to $19.75 billion, surpassing expectations.
Despite the prevalent supply chain challenges, Boeing's Commercial Aerospace division has shown resilience and promise.
On the financial front, the company reported a free cash flow of $2.58 billion for the second quarter, contrasting sharply with the $182 million cash depletion experienced in the prior year. Furthermore, with an adjusted loss of 82 cents per share, Boeing managed to perform better than the anticipated 88-cent loss forecasted by Refinitiv analysts. Impressively, Boeing's revenue climbed by 18%, settling at $19.75 billion and surpassing projections of $18.45 billion.
However, Boeing's defense sector is grappling with setbacks. This division's margins dipped into the negatives, primarily attributed to unforeseen costs. A hefty charge of $514 million was incurred due to the indefinite postponement of the Starliner space capsule launch in June. Additional financial strains were felt from expenses tied to the T-7 training jet and scheduling shifts for the MQ-25 tanker drone. With determination, company spokesperson West declared the imperative need to enhance the defense margins in the coming year.
The global aviation landscape is rapidly changing, with travel demand bouncing back post-pandemic. Responding to the call, Boeing plans to accelerate the production of 737s, eyeing a monthly output of 38 units. With 228 MAXs currently in its inventory, the aerospace titan intends to roll out the majority by the end of 2024. West pointed out that 85 of these jets are destined for Chinese clientele, and an additional 55 MAXs, originally reserved for Chinese carriers, are now being remarketed.
Closing on a forward-looking note, Boeing remains steadfast in its mission for the year. The company is focused on achieving a free cash flow in the range of $3 billion to $5 billion. Furthermore, as we edge closer to 2023, Boeing has committed to delivering at least 400 of its single-aisle 737s and 70 units of the 787 Dreamliners.
