Boeing Q4 2021 Earnings Report Recap

BA missed on earnings and revenue

Key Takeaways

  • Boeing delivered 99 commercial airplanes in Q4, missing analyst estimates.
  • Commercial airplane deliveries sank last year as the COVID-19 pandemic hit air travel demand, but as that demand has begun to pick up this year, so too has demand for commercial airplanes.
  • Boeing is in discussions with the FAA regarding required actions for the return to service of its 787 aircraft.
Boeing Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Adjusted EPS Miss -$7.69 -$0.28
Revenue Miss $14.8B $17.1B
Commercial Airplane Deliveries Miss 99 104.4

Source: Predictions based on analysts' consensus from Visible Alpha

Boeing (BA) Financial Results: Analysis

The Boeing Company (BA) reported Q4 FY 2021 earnings that badly missed analyst expectations. The company reported an adjusted loss per share that was far wider than analysts had predicted. Revenue also came in significantly below consensus estimates, falling 3.3% year over year (YOY). Analysts had predicted revenue to rise 11.5% YOY. Boeing delivered 99 commercial airplanes during the quarter, below what analysts had forecast. The company's shares were up more than 1% in pre-market trading. Over the past year, Boeing's shares have provided a total return of 0.4%, below the S&P 500's total return of 13.0%.

BA Commercial Airplane Deliveries

Boeing's commercial airplane deliveries rose 67.8% compared to the year-ago quarter. It was the most deliveries the company has reported since the first quarter of FY 2019. 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 after its involvement in two fatal crashes, have also affected demand. Subsequent electrical issues with the aircraft also affected demand following its approval for return to service in late 2020. But the 737 MAX has returned to service in the U.S. Boeing said that it was continuing to make progress on the global return to service of the aircraft. The company is currently producing 26 of its 737 MAX aircraft per month and is looking to progress toward 31 per month in early 2022.

Deliveries of Boeing's 787 Dreamliner have been halted and are likely to remain frozen until about April as U.S. regulators review production flaws with the aircraft. The company has not been able to deliver its 787s for most of the past 15 months due to the production issues. Boeing said that it was in detailed discussions with the Federal Aviation Administration (FAA) regarding necessary actions in order to resume deliveries of the aircraft. The company determined during the fourth quarter that its work on the aircraft would take longer than previously expected. Boeing thus recorded a $3.5 billion pre-tax non-cash charge on its 787 program. The company is currently producing its 787s at a very low rate until deliveries resume. Supply chain issues, including labor shortages, are also hurting Boeing and other aircraft manufacturers.

Boeing's next earnings report (for Q1 FY 2022) is anticipated to be released on April 27, 2022.

Article Sources
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  2. Boeing Co. "Boeing Reports Fourth-Quarter Results," Page 3. Accessed Jan. 26, 2022.

  3. Visible Alpha. "Financial Data." Accessed Jan. 26, 2022.

  4. TradingView. "Price Chart: BA and S&P 500." Accessed Jan. 26, 2022.

  5. CNBC. "One Year After the 737 Max's Return, Boeing Is Still Trying to Get Back on Course." Accessed Jan. 26, 2022.

  6. Reuters. "Boeing Recovery Sidetracked by Regulatory Tussles on Big Jets." Accessed Jan. 26, 2022.

  7. CNBC. "Boeing Takes $3.5 Billion Charge on 787 Dreamliner but Generates Positive Cash Flow for First Time Since 2019." Accessed Jan. 26, 2022.

  8. Reuters. "Aviation Supply Chain Faces Mounting Strain as Demand Picks Up." Accessed Jan. 26, 2022.

  9. Investing.com. "Boeing Co (BA): Financials—Earnings." Accessed Jan. 25, 2022.

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