Boeing reported mixed third-quarter earnings results early Wednesday, with a sweeping new financial deal with jet supplier Spirit AeroSystems weighing on its cash flow. But the Dow Jones aerospace giant reaffirmed 2023 cash flow targets even as it trimmed 737 Max delivery goals.
Boeing stock opened higher Wednesday, but reversed to hit a fresh 2023 low in whipsaw trading.
Boeing Earnings Woes
Estimates: Analysts expected Boeing to sharply pare its net loss per share to $3.18 from $6.18 a year ago, according to FactSet.
Revenue was seen growing almost 13%, year over year, to $18.013 billion.
Adjusted free cash burn was $310 million, worse than expected.
Boeing has already reported Q3 deliveries of 105 commercial planes and 28 defense jets. It also reported orders for 224 planes during September, up from 45 orders in August, reflecting the ongoing recovery in commercial air travel.
Results: Boeing pared its loss to $3.26 a share while revenue climbed 13% to $18.1 billion. It was the ninth consecutive quarterly loss and the third straight quarter of slowing sales gains.
Outlook: Boeing still sees full-year operating cash flow of $4.5 billion-$6.5 billion and free cash flow of $3 billion-$5 billion. Analysts expect $4.67 billion and $3.35 billion, respectively.
Boeing also trimmed its 737 Max delivery forecast for the year amid ongoing production issues.
Boeing Stock
Shares of Boeing rose to 187 soon after the open, reversed to a 2023 low of 176.25, then swung up and down in Wednesday's stock market action. Shares closed down 2.5% at 177.73. Boeing stock is at an 11-month low and remains well below the 10-week and 40-week moving averages, the MarketSmith chart shows. BA stock offers no buy point after its last breakout in July failed.
Boeing's Millions To Support Spirit
This year, quality defects at fuselage supplier Spirit AeroSystems have curbed Boeing's 737 and 787 programs, which already suffered during the pandemic. Those issues include misdrilled holes in the aft fuselage bulkhead of the 737, Boeing's bestselling jet.
But on Monday, Bernstein analysts cut their price target on Boeing to $270 from $274, while upgrading Spirit stock to outperform.
The firm now expects 396 deliveries of the 737 in 2023, the Fly reported. That is below the low end of company guidance for 400-450 deliveries. Bernstein analysts also noted news last week of a financial agreement between Boeing and Spirit AeroSystems.
Boeing will now pump $100 million immediately into its troubled supplier, aiming to stabilize jet production. But analysts at Vertical Research expect the money to come out of Boeing's cash flow, the most closely watched metric on Wall Street.
Despite rising orders, Boeing stock has slumped 25% below the 52-week high, set in July, while losing key levels of support.
Spirit AeroSystems fired chief executive Tom Gentile this month, replacing him with former Boeing executive Pat Shanahan. It is due to report earnings Nov. 1, before the market opens.
SPR stock fell 4.6% Wednesday. Spirit Aero gained 1% to 22.15 on Tuesday. Shares hit a three-year low of 14.65 last month.
