Boeing Earnings Take Flight as Air Travel Recovers

The plane maker's stock is up more than 70% in less than four months as it ramps up deliveries in the wake of prolonged and costly groundings

Business Class on Boeing 787-10 Airplane

Bloomberg/Getty Images

Key Takeaways

  • Boeing is expected to post fourth-quarter adjusted earnings of 41 cents per share on Jan. 24.
  • Shares have surged more than 70% since the end of September amid a recovery in global air travel.
  • The company is generating cash again and has projected $3 billion to $5 billion of free cash flow in 2023.
  • Commercial plane deliveries grew in 2022 despite supply chain snags, while Boeing's defense unit suffered a $2.8 billion loss in the third quarter.

Aircraft maker Boeing (BA), riding the recovery in global travel, is set to report fiscal fourth-quarter earnings with its cash flow and share price on an upswing and analysts forecasting its first profitable quarter in six.

Boeing, the world's second-largest supplier of commercial jets, is expected to post adjusted net income of 41 cents per share when it reports before the start of trading on Jan. 25, according to estimates compiled by Visible Alpha. The company reported per share losses of $7.69 a year earlier and $15.25 in the final quarter of 2020.

Boeing operations drained more than $24 billion of cash in the three years through 2021 amid the pandemic and safety issues that resulted in the prolonged grounding of the company's two newest and most important jet models, the 737 MAX and the 787 Dreamliner.

Those fiascos, which left Boeing trailing rival Airbus in global market share, are now in the rearview mirror. In August, Boeing restarted Dreamliner deliveries, halted for most of the two preceding years by manufacturing flaws. United Airlines (UAL) gave the Dreamliner a vote of confidence in December when it ordered 100 787s with the option to buy 100 more. United also bought 100 737 MAXs, the plane grounded in 2019 after two crashes blamed on a software flaw.

Boeing has struggled to meet surging demand for its planes in the face of supply chain snags. Grounded Dreamliners need to be recertified in a process more cumbersome than their initial assembly before delivery. Despite those difficulties, Boeing delivered 480 commercial planes in 2022, a 41% increase from the prior year. It delivered 152 commercial planes in the fourth quarter, up from 112 in the third quarter.

The company has projected free cash flow of $2.5 billion in the fourth quarter and $3 billion to $5 billion in fiscal 2023, en route to its target of $10 billion annually by 2026.

Next week's earnings report may offer a status update on efforts to fix the company's recently restructured defense business, where overruns on fixed-cost programs resulted in a $2.8 billion loss in the most recent quarter.

The stock has been on a tear of late, soaring 73% since Sept. 30 through Wednesday and setting an 11-month high this week. Boeing shares are down 4% over the past year, compared with a 5% decline for the S&P 500 Industrials sector.

1-Year Total Return for BA and S&P 500 Industrials

1-Year Total Return for BA and S&P 500 Industrials
Source: TradingView.

Boeing Key Stats

  Estimate for
Q4 FY 2022
Q4 FY 2021 Q4 FY 2020
Adjusted Earnings Per Share ($) 0.41 -7.69 -15.25
Revenue ($B) 20 14.8 15.3
Commercial Airplanes Delivered 152 99 59

Source: Visible Alpha

The Key Metric

Commercial airplane deliveries track Boeing's success in meeting the demand for products at its most important business segment. The company delivered a record 806 planes in 2018, before the grounding of the 737 MAX.

Article Sources
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  1. Boeing. "Form 10-K, Fiscal Year Ended Dec. 31, 2021," Page 45.

  2. Seattle Times. "Year-End Surge Boosts Boeing, But Airbus Still No. 1 in 2022."

  3. Simple Flying. "FAA Approves Boeing Inspection & Modification Plan to Restart 787 Deliveries."

  4. Boeing. "Boeing, United Airlines Finalize 737 MAX and 787 Order, Including Record Purchase for 100 Dreamliners."

  5. CNBC. "Airbus and Boeing Jet Delivery Delays Spark Penalties Battle."

  6. Reuters. "Boeing Jetliner Unit Names New Supply-Chain, Sales Execs."

  7. Boeing. "2022 Boeing Investor Conference Transcript." Page 5.

  8. Boeing. "Boeing Reports Commercial Orders and Deliveries for 2022."

  9. Boeing. "Boeing Announces Fourth-Quarter Deliveries."

  10. Boeing. "Boeing Announces Third-Quarter Deliveries."

  11. Boeing. "Boeing 2022 Investor Conference Presentation," pp. 11-14.

  12. Boeing. "Boeing Reports Third-Quarter Results."

  13. Boeing. "Boeing Reorganizes Defense, Space & Security Business Unit."

  14. Boeing. "Boeing Sets New Airplane Delivery Records, Expands Order Backlog."

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