Boeing stock surged after Boeing reported a better-than-expected loss in the fourth quarter early Wednesday. The Dow Jones aerospace leader declined to provide a 2024 guidance amid its 737 Max-9 production issues during the earnings call.
Boeing lost 47 cents per share adjusted improving from a loss of $1.75 per share last year. Revenue growth slowed for the fourth consecutive quarter, increasing 10% to $22.02 billion.
FactSet analysts expected a loss of 78 cents per share on $21.14 billion in sales.
Commercial airplane revenue jumped 13% to $10.48 billion during the quarter while Boeing's defense, space and security business unit recorded a 9% sales increase to $6.75 billion. Global services revenue rose 6% to $4.85 billion.
Boeing delivered 157 commercial planes during the quarter and recorded 611 net orders. The net bookings included 411 orders for 737s, 98 777X planes and 83 787 aircraft. Boeing also began certification flight testing for its 737-10 and resumed production on the 777X program.
The company's 737 program continues to deliver airplanes and its production rate is now 38 planes per month while 787 production stands at five planes per month, unchanged from its Q3 rates. As of Q3, Boeing planned to increase 737 production to 50 planes per month in the 2025-2026 timeframe, while 787 production rises to 10 jets per month during that period.
Boeing's backlog at quarter-end stood at over 5,600 aircraft valued at $441 billion. Fourth-quarter free cash flow came out to $3 billion, easing from $3.1 billion last year.
The company did not provide guidance in the wake of its 737 Max woes. CEO David Calhoun in the earnings call said Boeing would release its outlook in the future when appropriate.
Executives also confirmed aircraft deliveries to China following reports last week that China Southern Airlines received its first 737 Max plane after Beijing banned the model in 2019.
737 Max Update
Calhoun in the earnings call said he could not comment or speculate on the root cause of the 737 Max-9 plug issue during the National Transportation Safety Board investigation. But regardless of the findings, Boeing is responsible.
"We caused the problem and we understand that," Calhoun said, adding Boeing is overhauling its quality and production processes as it works to restore confidence from customers, regulators and plane operators.
In the earnings release, Boeing reported that it continues to cooperate with the Federal Aviation Administration after the regulator grounded all U.S.-based 737 Max-9 jets in service following an emergency landing during an Alaska Airlines flight on Jan. 5. The Dow Jones jet maker said it has taken action to strengthen quality controls for its 737 program, including additional inspection requirements at its factories and facilities from key suppliers, such as Spirit AeroSystems. Boeing also said it is making efforts to support expanded oversight from airline customers. In mid-January, Boeing invited 737 operators to review its production quality procedures and launched an independent assessment of its Quality Management System.
Emergency Landing Fallout
Boeing 737 Max 9 planes returned to the skies as Alaska Airlines and United Airlines resumed flights on Friday and Saturday. Calhoun in the earnings call noted that nearly all 737 Max-9 models are back in service.
Alaska Airline expects to complete all 737 Max inspections by the end of the month. The airline also plans to increase oversight of Boeing 737 Max 9 production, Alaska announced in its Q4 report.
However, the FAA capped production expansion of new Boeing 737 Max aircraft. It is launching an investigation into the Dow Jones giant's manufacturing process to ensure quality control, the regulator announced last Wednesday. The increased oversight will include a larger floor presence at Boeing facilities. The FAA will also assess potential safety-focused reforms around Boeing's control and delegation processes.
Boeing Stock
Boeing stock jumped 5.3% Wednesday. Shares retreated 2.3% during Tuesday trade.
BA shares has dived 19% so far in 2024. Almost all of that came after the Alaska Airlines emergency landing.
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