Boeing cash flow positive in Q4, misses on revenue and earnings

Boeing announced positive cash flow for the first time since 2019 in its fourth quarter results on Wednesday, but still missed market expectations on revenue and losses per share.

The Dow Jones Industrial Average component recorded revenue of $14.8bn for the final three months of 2021, and core, non-GAAP losses per share of $7.69.

Wall Street had been anticipating revenue of $16.59bn, and losses of just 42 cents per share, according to Refinitiv.

The planemaker did record operating cash flow of $0.7bn for the quarter, which was the first time that figure was positive since 2019.

For the full year, Boeing said revenue totalled $62.3bn, with its operating cash flow coming in at a negative $3.4bn, while cash and marketable securities at year-end on 31 December stood at $16.2bn.

Its core losses per share totalled $9.44 for 2021.

On the operational front, Boeing noted the continued global return to service of its troubled 737 MAX aircraft family, including progress on getting recertification in China.

The 737 MAX was grounded by aviation authorities globally in March 2020, after two fatal, total hull loss crashes in Indonesia and Ethiopia killed almost 350 people.

Those crashes were found to have been related to Boeing’s ‘Manoeuvring Characteristics Augmentation System’ (MCAS) software, which was designed to offset the aerodynamic effects of the 737 MAX’s much larger engines and higher wings compared to earlier 737s.

Pilots were not trained on MCAS, its effects, or what to do when it forced a plane’s nose downwards, in a bid to minimise air crew training time on the new aircraft and thus maximise its attractiveness to airline customers.

The aircraft were recertified by most authorities in 2021, with China allowing the 94 planes extant in the country to resume flying, and making plans for the 120 still in Boeing’s possession to be delivered to Chinese airlines from 2022.

Boeing said it had a total backlog of $377bn at the end of 2021, and added 535 net commercial orders during the year overall.

“2021 was a rebuilding year for us as we overcame hurdles and reached key milestones across our commercial, defence and services portfolios,” said president and chief executive officer David Calhoun.

“We increased 737 MAX production and deliveries, and safely returned the 737 MAX to service in nearly all global markets.

“As the commercial market recovery gained traction, we also generated robust commercial orders, including record freighter sales.”

Calhoun said that the return to positive cash flow in the fourth quarter demonstrated the company’s progress in its overall recovery.

“On the 787 program, we're progressing through a comprehensive effort to ensure every aeroplane in our production system conforms to our exacting specifications,” he added, referring to the series of issues plaguing production of the 787 ‘Dreamliner’ widebody aircraft.

The House Transportation and Infrastructure Committee in Washington asked for a review of how the Federal Aviation Administration (FAA) was overseeing the 787’s production in November.

That came after Boeing confirmed that a number of titanium parts used on the aircraft were not made properly over at least three years.

Other issues had caused the company to halt 787 production in September 2020, and May 2021.

The 787’s troubled history included global groundings early in its service career after a series of fires caused by lithium-ion batteries installed to power its components, as well as cracking issues in the Rolls-Royce engines designed to power the jets.

Boeing’s construction of a plant in Charleston, South Carolina to manufacture the Dreamliner using a non-union workforce has also called the skill and workmanship of the facility into question, particularly compared to the company’s long-organised staff at its veteran factories in Washington state.

“While this continues to impact our near-term results, it is the right approach to building stability and predictability as demand returns for the long term,” David Calhoun said.

“Across the enterprise, we remain focused on safety and quality as we deliver for our customers and invest in our people and in our sustainable future.”

Boeing shares were up in pre-market trading in New York on Wednesday, gaining 2.23% by 0853 EST to $208.65.