Boeing Reports Second-Quarter Results

posted on 27th July 2022 by Eddie Saunders
Boeing Reports Second-Quarter Results

Second Quarter 2022

  • Operating cash flow of $0.1 billion; continue to expect positive free cash flow for 2022
  • Increased 737 production to 31 per month; working with FAA on final actions to resume 787 deliveries
  • Successfully completed CST-100 Starliner uncrewed Orbital Flight Test-2 (OFT-2)
  • Revenue of $16.7 billion; GAAP earnings per share of $0.32 and core (non-GAAP)* loss per share of ($0.37)
  • Total backlog of $372 billion; including over 4,200 commercial airplanes
Table 1. Summary Financial Results Second Quarter First Half
(Dollars in Millions, except per share data) 2022 2021 Change 2022 2021 Change
Revenues $16,681 $16,998 (2) % $30,672 $32,215 (5) %
GAAP
Earnings/(Loss) From Operations $774 $1,023 (24) % ($395) $940 NM
Operating Margin 4.6 % 6.0 % (23) % (1.3) % 2.9 % NM
Net Earnings/(Loss) $160 $567 (72) % ($1,082) $6 NM
Earnings/(Loss) Per Share $0.32 $1.00 (68) % ($1.73) $0.09 NM
Operating Cash Flow $81 ($483) NM ($3,135) ($3,870) NM
Non-GAAP*
Core Operating Earnings/(Loss) $490 $755 (35) % ($962) $402 NM
Core Operating Margin 2.9 % 4.4 % (34) % (3.1) % 1.2 % NM
Core (Loss)/Earnings Per Share ($0.37) $0.40 NM ($3.11) ($1.12) NM
*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.”

The Boeing Company reported second-quarter revenue of $16.7 billion, GAAP earnings per share of $0.32 and core loss per share (non-GAAP)* of ($0.37), driven by lower defense volume and unfavorable performance, partially offset by higher commercial volume (Table 1).

Boeing recorded positive operating cash flow of $0.1 billion.

“We made important progress across key programs in the second quarter and are building momentum in our turnaround,” said Dave Calhoun, Boeing President and Chief Executive Officer.

“As we begin to hit key milestones, we were able to generate positive operating cash flow this quarter and remain on track to achieve positive free cash flow for 2022.

“While we are making meaningful progress, we have more work ahead.

“We will stay focused on safety, quality and transparency, as we drive stability, improve performance, and continue to invest in our future.”

Table 2. Cash Flow Second Quarter First Half
(Millions) 2022 2021 2022 2021
Operating Cash Flow $81 ($483) ($3,135) ($3,870)
Less Additions to Property, Plant & Equipment ($263) ($222) ($612) ($513)
Free Cash Flow* ($182) ($705) ($3,747) ($4,383)
*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.”

Operating cash flow improved to $0.1 billion in the quarter, reflecting higher commercial deliveries and timing of receipts and expenditures (Table 2).

Table 3. Cash, Marketable Securities and Debt Balances Quarter-End
(Billions) Q2 22 Q1 22
Cash $10.0 $7.4
Marketable Securities1 $1.4 $4.9
Total $11.4 $12.3
Debt Balances:
The Boeing Company, net of intercompany loans to BCC $55.7 $56.2
Boeing Capital, including intercompany loans $1.5 $1.5
Total Consolidated Debt $57.2 $57.7
1 Marketable securities consist primarily of time deposits due within one year classified as “short-term investments.”

Cash and investments in marketable securities decreased to $11.4 billion, compared to $12.3 billion at the beginning of the quarter, primarily driven by debt repayment (Table 3). The company has access to credit facilities of $14.7 billion which remain undrawn.

Total company backlog at quarter-end was $372 billion.

Segment Results

Commercial Airplanes

Table 4. Commercial Airplanes Second Quarter First Half
(Dollars in Millions) 2022 2021 Change 2022 2021 Change
Commercial Airplanes Deliveries 121 79 53 % 216 156 38 %
Revenues $6,219 $6,015 3 % $10,380 $10,284 1 %
Loss from Operations ($242) ($472) NM ($1,101) ($1,328) NM
Operating Margin (3.9) % (7.8) % NM (10.6) % (12.9) % NM

Commercial Airplanes second-quarter revenue increased to $6.2 billion, driven by higher 737 deliveries, partially offset by lower 787 deliveries (Table 4).

Operating margin of (3.9)% also reflects abnormal costs and period expenses, including higher R&D expense.

Boeing has nearly completed the global safe return to service of the 737 MAX and the fleet has flown more than 1.5 million total flight hours since late 2020.

The 737 production rate increased to 31 airplanes per month during the quarter.

On the 787 program, the company continues to work with the FAA to finalize actions to resume deliveries and is readying airplanes for delivery.

The program is producing at a very low rate and will continue to do so until deliveries resume, with an expected gradual return to five per month over time.

The company still anticipates 787 abnormal costs of approximately $2 billion, with most being incurred by the end of 2023, including $283 million recorded in the quarter.

Commercial Airplanes secured orders for 169 737 MAX airplanes and 13 freighters, including seven 777-8 Freighters from Lufthansa Group. Commercial Airplanes delivered 121 airplanes during the quarter and backlog included over 4,200 airplanes valued at $297 billion.

acklog at Defense, Space & Security was $55 billion, of which 33% percent represents orders from customers outside the U.S.