Boeing reported an over $650 million operating loss in the fourth quarter, taking many Wall Street analysts by surprise who had anticipated that the aerospace giant would turn a quarterly profit.
The company put the blame on the unexpected loss of “abnormal production costs” as it attempted both to deliver the remaining backlog of 737 Max jets and to ramp up deliveries of the 787 Dreamliners. The company’s production of the 787 remains under the normal rates of production usually. What’s more, Boeing had to shell out an unspecified amount of compensation to 787 customers whose deliveries were delayed by about a year.
Boeing has reported only two profitable quarters in the nearly four years since the grounding of the 737 Max. The company has also yet to recover from deadly crashes involving two of its 737 Max jets and a pandemic that depressed airline demand for new planes until recently - sparking the cancellation of hundreds of jet orders and the pileup of losses for Boeing.
The company’s revenue also fell short of forecasts, coming in at just under $20 billion. While it was Boeing’s highest revenue figure since the start of the pandemic, it was about $360 million less than analysts’ consensus estimate.
Airline and aerospace giant pointed out, however, that this had been the first full year of positive operating cash flow since the start of the 737 Max crisis. Boeing finally brought in $3.5 billion more cash than it spent, and the company reaffirmed its guidance for 2023 of positive operating cash flow of between $4.5 billion to $6.5 billion.
Boeing said it is stabilizing production of new 737s at 31 per month and plans to speed that up to about 50 per month by 2025 or 2026, and will also boost production of 787s. In a note to employees, CEO David Calhoun said the company is “making important strides” to improve performance. He expressed confidence “despite the hurdles in front of us.”
Boeing, based in Arlington, Virginia, has seen deliveries rise since regulators approved the 737 Max to fly again in late 2021 and after the company satisfied regulators that it fixed production problems on another plane, the larger 787 Dreamliner. Deliveries are an important source of company cash.
“Demand across our portfolio is strong, and we remain focused on driving stability in our operations and within the supply chain to meet our commitments in 2023 and beyond,” said CEO Dave Calhoun in the company’s statement. “While challenges remain, we are well positioned and are on the right path to restoring our operational and financial strength.”
Shares of Boeing fell 2% in premarket trading on the report.