Boeing earnings miss estimates as Air Force One costs weigh
Boeing reported a wider adjusted loss than Wall Street expected after a $280 million loss tied to its delayed Air Force One program.
By Daniel Okafor · Business Editor
3 min read
Boeing earnings fell short of Wall Street expectations in the second quarter as costs tied to the company’s delayed Air Force One work weighed on results, CNBC reported. Revenue rose from a year earlier, but the aircraft maker still posted an adjusted loss that was wider than analysts had forecast.
Boeing recorded a $280 million loss on the program to build two 747 aircraft that will serve as the next generation of Air Force One planes for the U.S. government, according to CNBC. The company said the added cost came as it increased investment in the aircraft, while still expecting the first delivery in 2028.
“While we’re making progress on our development programs, you’re never done until you’re done,” Boeing CEO Kelly Ortberg said in a note to employees cited by CNBC.
Why did Boeing earnings miss estimates?
Boeing reported an adjusted loss of 76 cents a share for the quarter, compared with a 30-cent loss expected by analysts surveyed by LSEG, CNBC reported. Revenue came in at $24.56 billion, topping the $24.25 billion analysts had expected.
The company’s net loss narrowed to $428 million, or 67 cents a share, from a loss of $612 million, or 92 cents a share, in the same quarter last year, according to CNBC. The adjusted result excludes one-time items.
The Air Force One program was the main drag highlighted in the report. In this program, Boeing is building two 747s for the U.S. government that are intended to replace the current presidential aircraft.
Deliveries and cash flow improved
Boeing’s revenue increased 8% from a year earlier, with growth across its businesses and higher commercial aircraft deliveries, CNBC reported. The company delivered 171 commercial planes in the second quarter, up 14% from 150 aircraft in the year-earlier period.
CNBC reported that Boeing has been raising production of its 737 Max jets toward 47 aircraft a month, with more increases planned. The 737 Max remains the company’s best-selling aircraft family.
Free cash flow was also stronger than analysts expected. Boeing reported $631 million in free cash flow, while analysts had expected a cash burn of $177 million, according to CNBC. In the second quarter of last year, Boeing used $200 million in cash.
Ortberg told employees that two quarters do not make a full year, but said the company could improve its competitiveness and position itself for a stronger second half if it stays focused on safety, quality and on-time performance, CNBC reported.
What comes next for Boeing?
CNBC reported that Boeing still faces certification milestones for delayed aircraft programs. The next likely certification is the Boeing 737 Max 7, the smallest member of the 737 Max family.
Boeing executives were scheduled to speak with analysts at 10:30 a.m. ET, according to CNBC. They were expected to face questions about certification of the 737 Max 10 and the 777X, Boeing’s new wide-body aircraft.
This story draws on original reporting from CNBC.