It appears to have turned the cash flow angle. This is good news, but the company is still unable to reap profits, as the profits came in contrary to expectations once again, which led to a drop in the stock in Wednesday’s trading.
(Stock ticker: BA), Wednesday morning, mentioned In the fourth quarter a loss of $1.75 per share from $20 billion in sales.
Wall Street was looking for earnings per share of 17 cents on $20 billion in sales for Boeing. The profit shortfall was primarily driven by special items that totaled about $800 million, up about $550 million compared to the fourth quarter of 2021. CFO Brian West highlighted the “abnormal costs” on the company’s earnings conference call, including Ongoing supply chain problems.
Vertical Research Partners analyst Rob Stallard wrote in a report Wednesday that the profit and loss statement “remains a bit of a mess.” Commercial aircraft and defense and lending units missed its operating profit estimates. Still, its quarterly free cash flow, at $3.1 billion, was in line with its expectations, and Stallard noted that Boeing paid off about $3 billion in debt in the quarter. He values the stock and has a $175 price target for Boeing shares.
The fourth quarter is the second consecutive quarter in which Boeing posted positive free cash flow.
Prior to today’s results, Boeing had generated only positive free cash flow two quarters Out of 14, after the 737 MAX disaster and the Covid-19 pandemic. Aircraft deliveries plummeted as airlines struggled to stay afloat amid falling demand for air travel.
Looking ahead, Boeing expects to generate between $3 billion and $5 billion in free cash flow through 2023. Wall Street currently forecasts $4.2 billion. Analysts expect the company to deliver nearly 600 aircraft, up from 480 delivered in 2022.
A lot of those deliveries will end up in China which has recently started flying the 737 MAX again. Boeing finished the year with about 250 MAXs in stock. The company said about 140 of those are for Chinese customers.
As trading began Wednesday, Boeing stock is up about 11% this year and about 48% over the past three months. The S&P 500 is up about 5% so far this year and 6% over the past three months. The year-to-date and three-month change in the Dow Jones Industrial Average was 2% and 7%, respectively.
Write to Al Root at [email protected]