Boeing Will Probably Report First Profit in Six Quarters

Focus on Commercial Jet Deliveries

Key Takeaways

  • Analysts estimate adjusted EPS of $0.11 vs. -$0.60 in the third quarter of 2021.
  • Commercial airplane deliveries, already announced, missed estimates though they rose to the second-highest level in nearly four years.
  • Revenue is expected to rise by the most in six quarters as commercial aircraft demand recovers from the impact of the COVID-19 pandemic.

The Boeing Co. (BA), the second-largest aircraft manufacturer in the world by market capitalization, will probably report its first profit in six quarters as revenue growth accelerates amid rebounding deliveries of commercial jets such as its 787 Dreamliner.

Boeing is likely to post adjusted earnings per share (EPS) of $0.11 compared with a loss per share of $0.60 for the prior-year quarter. It would be Boeing's first profit since the second quarter of last year. Revenue is expected to rise 18% year-over-year to $18 billion, the largest increase in six quarters, according to an average estimate from Visible Alpha. Boeing will release results before the market opens on Oct. 26.

Demand for commercial jets plunged during the pandemic as supply chain bottlenecks and quality control problems delayed manufacturing and deliveries. The company restarted 787 deliveries in August after more than a year of delays as the company made manufacturing changes to meet U.S. regulatory standards. The recovery of global air travel also fueled demand for Boeing jets.

Boeing said Oct. 11 that its key metric -- commercial airplanes delivered -- rose 32% to the second-highest in 15 quarters, even though it missed estimates.

Boeing shares have fallen 33% in the last year compared with a 17% drop in the S&P 500 Index.

One Year Total Return for S&P 500 and Boeing
Source: TradingView.

Boeing Earnings History

Boeing posted a total of $21 billion in net operating losses during the three years through 2021. The company also reported losses in the first two quarters of this year.

Revenue declined in four of the five years through 2020, then rose 7% last year before dropping in this year's first half.

Boeing Key Stats
  Q3 FY 2022 Q3 FY 2021 Q3 FY 2020
Adjusted Earnings Per Share ($) 0.11 (estimated) -0.60 -1.39
Revenue ($B) 18.0 (estimated) 15.3 14.1
Commercial Airplane Deliveries 112 (actual) 85 28

Source: Visible Alpha; Boeing.

The Key Metric

Boeing manufactures both commercial and military aircraft, the former of which is more sensitive to economic conditions like the pandemic compared with aircraft for government-financed military programs, a more stable source of demand. Issues with some of the company's key aircraft, including the grounding of the 737 MAX and subsequent electrical issues, have also hit demand, although the company has resumed delivery of many of its aircraft.

Boeing said in early October that it delivered 112 commercial aircraft for the quarter, lagging behind analyst estimates of 120. It was still the second-largest number of commercial aircraft delivered in a quarter since early 2019.

Article Sources
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  1. Reuters. "U.S. okays first Boeing 787 Dreamliner delivery since '21 -sources."

  2. "Largest aircraft manufacturers by market cap."

  3. Boeing. "Boeing Third Quarter Earnings Date."

  4. Visible Alpha. "Financial Data."

  5. Bloomberg. "Boeing Vows It Won’t Build ‘Gliders’ as Engine Shortage Expands."

  6. Yahoo! Finance. "Will 787 Delivery Restart Aid Boeing (BA) in Q3 Earnings?"

  7. The Boeing Co. "Boeing Announces Third-Quarter Deliveries."

  8. Financial Times. "Aircraft sales show signs of life after pandemic slump."

  9. CNBC. "Boeing set to resume 737 Max deliveries, airlines start repairs after FAA approves electrical issue fix."

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