Boeing Q2 2022 Earnings Report Recap

^{Source: Predictions based on analysts' consensus from Visible Alpha}

Boeing (BA) Financial Results: Analysis

The Boeing Company (BA) reported Q2 FY 2022 earnings that dramatically missed analysts' consensus estimates. The company reported an adjusted loss per share that was significantly wider than analysts had forecast. Revenue also came in well below expectations, falling 1.9% year-over-year (YOY). Boeing said that revenue performance benefited from higher 737 deliveries, but was offset by lower 787 deliveries, and changes on fixed-price development programs. Analysts had predicted revenue to rise in Q2 YOY. Boeing delivered 121 commercial airplanes, which it reported earlier this month. That number was also below analyst estimates.

BA Commercial Airplane Deliveries

Boeing's commercial airplane deliveries rose 53.2% compared to the year-ago quarter. Boeing manufactures both commercial and military aircraft. Demand for the former type is much more sensitive to economic conditions, whereas demand for the latter depends on government policy decisions regarding military programs. It should be noted that the commercial airplane deliveries figure is a lagging indicator of demand since it is based on past rather than current orders for aircraft.

Demand for Boeing's commercial airplanes has been devastated in recent years by the pandemic's impact on the airline industry. Furthermore, issues with some of the company's key aircraft, including the grounding of the 737 MAX and subsequent electrical issues, have also affected demand.

BA Outlook and Stock Performance.

Despite decreases in revenue YOY and wider adjusted losses per share than expected, Boeing said that it was able to generate positive operating cash flow for the quarter. It expects to see positive free cash flow for all of FY 2022.

BA Conference Call Recap

In an earnings call with analysts after results were released, Boeing Chief Executive Officer (CEO) Dave Calhoun said the plane manufacturer is focusing on getting its Max 7 and Max 10 jet models certified by the Federal Aviation Administration (FAA) by the end of 2022. These two models are the smallest and largest in the Max family. Calhoun also indicated that supply constraints at engine makers were affecting Boeing. 

Boeing shares traded up by about 2.0% in pre-market trading following the company's earnings release. The company's stock has significantly underperformed the broader market, providing 1-year trailing total returns of -31.0% compared to -11.3% for the S&P 500 as of July 27.

Boeing's next earnings report (for Q3 FY 2022) is anticipated to be released on Oct. 26, 2022.