Boeing reports its second quarter results

Second Quarter 2022

  • Operating cash flow of $0.1 billion; continue to expect positive free cash flow for 2022
  • Increased 737 production to 31 per month; working with FAA on final actions to resume 787 deliveries
  • Successfully completed CST-100 Starliner uncrewed Orbital Flight Test-2 (OFT-2)
  • Revenue of $16.7 billion; GAAP earnings per share of $0.32 and core (non-GAAP)* loss per share of ($0.37)
  • Total backlog of $372 billion; including over 4,200 commercial airplanes

Table 1. Summary Financial Results

Second Quarter

First Half

(Dollars in Millions, except per share data)

2022

2021

Change

2022

2021

Change

Revenues

$16,681

$16,998

(2) %

$30,672

$32,215

(5) %

GAAP

Earnings/(Loss) From Operations

$774

$1,023

(24) %

($395)

$940

NM

Operating Margin

4.6

%

6.0

%

(23) %

(1.3)

%

2.9

%

NM

Net Earnings/(Loss)

$160

$567

(72) %

($1,082)

$6

NM

Earnings/(Loss) Per Share

$0.32

$1.00

(68) %

($1.73)

$0.09

NM

Operating Cash Flow

$81

($483)

NM

($3,135)

($3,870)

NM

Non-GAAP*

Core Operating Earnings/(Loss)

$490

$755

(35) %

($962)

$402

NM

Core Operating Margin

2.9

%

4.4

%

(34) %

(3.1)

%

1.2

%

NM

Core (Loss)/Earnings Per Share

($0.37)

$0.40

NM

($3.11)

($1.12)

NM

*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.” 

The Boeing Company reported second-quarter revenue of $16.7 billion, GAAP earnings per share of $0.32 and core loss per share (non-GAAP)* of ($0.37), driven by lower defense volume and unfavorable performance, partially offset by higher commercial volume (Table 1). Boeing recorded positive operating cash flow of $0.1 billion.

“We made important progress across key programs in the second quarter and are building momentum in our turnaround,” said Dave Calhoun, Boeing President and Chief Executive Officer. “As we begin to hit key milestones, we were able to generate positive operating cash flow this quarter and remain on track to achieve positive free cash flow for 2022. While we are making meaningful progress, we have more work ahead. We will stay focused on safety, quality and transparency, as we drive stability, improve performance, and continue to invest in our future.”

Table 2. Cash Flow

Second Quarter

First Half

(Millions)

2022

2021

2022

2021

Operating Cash Flow

$81

($483)

($3,135)

($3,870)

Less Additions to Property, Plant & Equipment

($263)

($222)

($612)

($513)

Free Cash Flow*

($182)

($705)

($3,747)

($4,383)

*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 6, “Non-GAAP Measures Disclosures.” 

 

Operating cash flow improved to $0.1 billion in the quarter, reflecting higher commercial deliveries and timing of receipts and expenditures (Table 2).

Table 3. Cash, Marketable Securities and Debt Balances

Quarter-End

(Billions)

Q2 22

Q1 22

Cash

$10.0

$7.4

Marketable Securities1

$1.4

$4.9

Total

$11.4

$12.3

Debt Balances:

The Boeing Company, net of intercompany loans to BCC

$55.7

$56.2

Boeing Capital, including intercompany loans

$1.5

$1.5

Total Consolidated Debt

$57.2

$57.7

1 Marketable securities consist primarily of time deposits due within one year classified as “short-term investments.”

 

Cash and investments in marketable securities decreased to $11.4 billion, compared to $12.3 billion at the beginning of the quarter, primarily driven by debt repayment (Table 3). The company has access to credit facilities of $14.7 billion which remain undrawn.

Total company backlog at quarter-end was $372 billion.

Segment Results

Commercial Airplanes

Table 4. Commercial Airplanes

Second Quarter

First Half

(Dollars in Millions)

2022

2021

Change

2022

2021

Change

Commercial Airplanes Deliveries

121

79

53 %

216

156

38 %

Revenues

$6,219

$6,015

3 %

$10,380

$10,284

1 %

Loss from Operations

($242)

($472)

NM

($1,101)

($1,328)

NM

Operating Margin

(3.9)

%

(7.8)

%

NM

(10.6)

%

(12.9)

%

NM

 

Commercial Airplanes second-quarter revenue increased to $6.2 billion, driven by higher 737 deliveries, partially offset by lower 787 deliveries (Table 4). Operating margin of (3.9)% also reflects abnormal costs and period expenses, including higher R&D expense.

Boeing has nearly completed the global safe return to service of the 737 MAX and the fleet has flown more than 1.5 million total flight hours since late 2020. The 737 production rate increased to 31 airplanes per month during the quarter.

On the 787 program, the company continues to work with the FAA to finalize actions to resume deliveries and is readying airplanes for delivery. The program is producing at a very low rate and will continue to do so until deliveries resume, with an expected gradual return to five per month over time. The company still anticipates 787 abnormal costs of approximately $2 billion, with most being incurred by the end of 2023, including $283 million recorded in the quarter.

Commercial Airplanes secured orders for 169 737 MAX airplanes and 13 freighters, including seven 777-8 Freighters from Lufthansa Group. Commercial Airplanes delivered 121 airplanes during the quarter and backlog included over 4,200 airplanes valued at $297 billion.Boeing

At quarter-end, Boeing Capital’s net portfolio balance was $1.6 billion. The change in loss from other unallocated items and eliminations was primarily due to the recognition of deferred compensation income as compared to expense recorded in the second quarter 2021. The second quarter effective tax rate primarily reflects tax expense on pretax earnings and an increase to the valuation allowance.

Boeing President and CEO Dave Calhoun shared the following message with employees today addressing the company’s second-quarter results:

Team,

This month, Boeing marked its 106th anniversary. Throughout our history, we have seen moments of triumph and moments of challenge. Through it all, our people have made the difference, and that could not ring truer today. As we report our second-quarter results, you will see that we are building momentum in our turnaround. Even as we navigate a difficult environment, we are making progress across key programs and are beginning to hit significant milestones.

Thanks to these efforts, we generated positive operating cash flow in the second quarter, and we remain on track to achieve positive free cash flow for 2022. This is underpinned by strong demand and our efforts to improve performance.

In our Commercial Airplanes business, we increased 737 MAX production and improved deliveries, while working to drive stability in our factory and within the supply chain. We also continued to support the growing fleet, which has now safely flown more than 1.5 million flight hours with greater than 99% schedule reliability since the ungrounding.

Our 787 team is in the final stages of preparing to restart deliveries and continues to work through the comprehensive and transparent process with our regulator. There is no doubt that it has been a long road, but I am proud of our team for raising their hands, sharing information transparently and doing the hard work it takes to position us for success. I’ve spent a lot of time with our teams in North Charleston and Everett, and the work our mechanics, technicians and engineers are doing is exceptional. It’s detailed, disciplined and rigorous – and your efforts will have a positive impact for decades to come.

As we improve performance, the commercial market recovery is also gaining traction and customers are demonstrating their confidence and trust in Boeing, our products and our people. We are honored to have announced more than 200 airplane orders and commitments at the Farnborough International Airshow last week, including key orders for the 737 MAX, 787, freighters and services.

In our Defense, Space and Security business, our successful uncrewed CST-100 Starliner mission with NASA was a key moment for Boeing and I was proud to be with our team at Cape Canaveral for the launch. This orbital flight test was an important reminder of what we’re capable of achieving and a demonstration of our focus on engineering excellence. That said, we continue to work through hurdles on our fixed-price development programs amidst a challenging macro-economic environment, which had an impact on our results.

Meanwhile, our Global Services team had another strong quarter supporting commercial and government customers. As the commercial market recovers, and thanks to our team’s performance, BGS has largely returned to pre-pandemic levels faster than our expectations, demonstrated by strong revenue and operating margins this quarter.

As demand grows across our markets, we are partnering with our supply chain to ensure our industry can meet that demand now and into our future. Supply chain constraints and inflation continue to challenge our world – and our industry is no exception. Even with demand high, we won’t chase production rates or push our system too fast. With safety and quality at the forefront, we will prioritize stability and predictability because when we get those right, all other metrics will follow.

While we are making progress, we have more work to do. And as we focus on improving our performance today, we are making research and development investments to lay the foundation for our next generation of products and advance our sustainability efforts. Most importantly, we’re also investing in our people and hiring in key areas of engineering and manufacturing.

This is a pivotal moment in our 106-year legacy – and this team has the opportunity to define our future. Together, we are taking the right actions and heading in the right direction. Our programs are beginning to meet key milestones and our financials are starting to reflect our efforts. Our team is tested, prepared and ready to deliver – and I am confident in our future. Thank you for all that you do every day to support our customers, our company and each other.

Dave