Boeing reported a far worse-than-feared loss and a surprise revenue decline for the first quarter amid higher costs, while delaying its newest passenger jet. Boeing stock tumbled to a new 52-week low.
The Dow Jones aerospace and defense giant announced early Wednesday that it would pause production for its new, widebody 777X passenger jet through 2023, due to certification issues. It now expects to push back the first deliveries by a year to 2025, with the delay leading to $1.5 billion in abnormal costs.
Demand for long-haul, widebody jets also suffered from the pandemic hit to international travel.
However, Boeing also said Tuesday that it has submitted a 787 certification plan to flight-safety regulators. And it expects to continue boosting production of the once-embattled 737 Max, targeting 31 a month in the current quarter. Countries grounded the jet in recent years after two fatal flights.
"Despite the pressures on our defense and commercial development programs, we remain on track to generate positive cash flow for 2022," Boeing CEO Dave Calhoun said in Wednesday's release.
Boeing previously warned that it expects Q1 to be the year's weakest quarter for deliveries, revenue, earnings and cash flow.
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Boeing Earnings
Estimates: Analysts polled by FactSet expected Boeing to narrow losses to 25 cents per share from a loss of $1.53 a year ago. Revenue was seen up 5% to $16.021 billion.
Results: Boeing widened its loss to $2.75 a share while revenue fell 8% to $13.99 billion.
In Q1, Boeing has already disclosed that it delivered 95 commercial jets and 41 defense jets. That tally included one F-15 fighter jet, 86 Boeing 737 jets and no 787 jets.
Outlook: Analysts polled by FactSet expect Boeing to swing to earnings of $2.82 per share in all of 2022 from a loss of $9.44 a year ago. The consensus estimate has not been updated for Wednesday's results.
Reuters reported on April 20 that Boeing has advised key airlines and parts suppliers that 787 deliveries would resume in the second half of 2022, after they were halted over structural flaws.
Boeing Stock
Shares dived 7.5% to 154.46 in Wednesday's stock market trading, falling to a 17-month low. Boeing stock has fallen well below technical levels of support, down about 39% over the past twelve months. Archrival Airbus dipped more than 1% Wednesday, also trading below key support.
On Tuesday, key Boeing jet-engine suppliers General Electric and Raytheon Technologies warned of new headwinds from the Russia-Ukraine war and the Covid resurgence in China.
Raytheon cut 2022 revenue while GE guided EPS to the low end of its forecast. RTX stock edged lower Tuesday and 0.35% on Wednesday. GE stock plunged more than 10% on Tuesday, then continued to slide Wednesday.
Last week, Lockheed Martin earnings took a hit from supply disruptions due to the Covid-19 omicron variant and rising inflation.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
