Boeing's Stock Surges After Another Revenue Beat, but Losses Were Wider Than Expected

Boeing Co. shares received a positive boost on Wednesday, following the release of their financial results. The aerospace and defense giant reported revenue that exceeded expectations for the third consecutive quarter, despite larger losses compared to what Wall Street had predicted.

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Investors found reassurance in Boeing's confirmation of its full-year guidance for free cash flow and for 787 deliveries. However, there was a reduction in the outlook for 737 deliveries due to recent quality issues leading to delivery delays.

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Chief Executive Dave Calhoun expressed confidence in their progress, saying, "We continue to make strides in our recovery, and despite facing short-term challenges, we remain on course to meet our financial goals for this year and the long term."

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In premarket trading, Boeing's stock surged by 3.1%, marking its third consecutive gain. This winning streak is significant as the stock had closed at a 10-month low on the previous Friday.

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The reported net losses decreased to $1.64 billion, equivalent to $2.70 per share, compared to $3.31 billion, or $5.49 per share, for the same period in the previous year. However, core per-share losses, excluding one-time items, were wider than the consensus estimate at $3.26, in contrast to the loss projection of $3.20.

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Boeing's revenue also saw growth, increasing by 13.5% to reach $18.10 billion, surpassing the FactSet consensus of $18.02 billion.

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While Boeing has exceeded revenue expectations for the past three quarters, it has fallen short of earnings expectations in eight of the previous nine quarters. The company has not reported an adjusted profit since the second quarter of 2021, based on data.

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Breaking down Boeing's various business segments, revenue from commercial airplanes experienced a 25.0% rise, reaching $7.88 billion, which exceeded the FactSet consensus of $7.49 billion. Global services revenue increased by 8.6% to $4.81 billion, surpassing the expected $4.73 billion. In contrast, defense, space, and security revenue rose by 3.3% to $5.48 billion but did not meet the expectations of $6.07 billion.

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The reported free cash flow was negative $310 million, differing from the FactSet consensus of negative $266.7 million.

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Looking ahead to 2023, Boeing upheld its guidance for free cash flow, targeting a range of $3.0 billion to $5.0 billion. They also maintained their outlook for 787 deliveries, aiming for 70 to 80, but adjusted their projection for 737 deliveries from 375 to 400, down from the previous range of 400 to 450.

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CEO Calhoun emphasized their focus on achieving stability in their supply chain and enhancing operational performance while gradually increasing production rates to meet strong demand.

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Over the past three months through Tuesday, Boeing's stock had declined by 14.8%, while the Dow Jones Industrial Average had seen a decrease of 6.5%.

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