Boeing reports quarterly earnings fall, plans to increase jet production

CEO David Calhoun points to more work ahead to stabilise operations, supply chain.

Boeing’s fourth-quarter profit and sales fell short of analysts’ expectations. Picture: AFP

Boeing has reported another quarterly loss but maintained plans to increase jet production and deliveries this year despite lingering supply-chain challenges.

The company reported its fourth annual loss in a row as it wrestles with commercial jet production costs that are higher than planned.

Both Boeing and rival Airbus benefited from a rebound in aircraft orders last year as airlines ­recovered from the pandemic-driven travel downturn. The companies have struggled to boost production to match, citing shortages of jet engines and other ­components.

Boeing’s fourth-quarter earnings and sales both fell short of expectations, though it didn’t report additional charges for production missteps, having taken some in 10 of the past 12 quarters.

Boeing president and chief executive officer David Calhoun. Picture: Bloomberg

Boeing has taken charges on big military programs including the KC-46A tanker and Air Force One replacement, for inefficient production rates on its commercial aircraft, and compensation for customers of delayed jets.

Boeing has been producing its 737 MAX jets at a lower rate than executives forecast. Deliveries of the single-aisle and the wide-body 787 Dreamliner have lagged analyst expectations. It said it would deliver 400-450 of its 737 MAX jets this year and 70-80 of its 787 Dreamliners. Boeing delivered 480 planes last year.

“We’re not shooting for the low end of the range here,” CEO David Calhoun said on an investor call. The company’s ability to increase production was mainly tied to suppliers raising their own output.

Boeing said it generated free cash last year for the first time since 2018. Executives have said they are targeting improved cash generation to help pay down debt.

Increasing aircraft production and deliveries helps improve the cash position as customers pay the bulk of an aircraft’s price when they receive jets.

Boeing’s existing 2023 guidance doesn’t include new deliveries to China, which have been paused for almost four years. Mr Calhoun said he was optimistic more Chinese carriers would start flying their existing MAX jets and then take some new ones, though he declined to say when that might happen.

Boeing delivered 69 jets last month, boosting sales, though the commercial arm reported an operating loss of $US626m ($880m) for the December quarter.

Boeing reported a loss of $US663m for the quarter, compared with a deficit of $US4.16bn a year earlier. Sales rose 35 per cent to $US20bn. It reported a loss of $US5.01bn in 2022 compared with a $US4.3bn year-earlier deficit of $US4.3bn, with sales for the year rising 7 per cent to $US66.6bn.

The Wall Street Journal