Boeing reported a $650 million operating loss in the fourth quarter, surprising Wall Street analysts who had expected the aircraft giant to turn a profit.
The company blames the unexpected loss on “abnormal production costs” as it both tried to meet the remaining backlog of 737 Max jets and ramped up deliveries of the 787 Dreamliners. Production of the 787 by the company remains below normal rates.
In addition, Boeing had to pay an undetermined amount of compensation to 787 customers whose deliveries were delayed by about a year.
Boeing has reported just two profitable quarters in the nearly four years since grounding the 737 Max. After two fatal crashes that killed 346 people, the plane was grounded for 20 months from March 2019. A year later, the pandemic caused the demand for flying and new aircraft to come to a near standstill – leading to the cancellation of hundreds of jet orders and accumulating losses for Boeing.
Still, the industry is showing signs of recovery, and analysts polled by Refinitiv had predicted that Boeing would earn 26 cents per share. Instead, it reported a loss of $1.75 per share. So while that’s an improvement from the $7.69 per share loss in Q4 2021, it’s also a major disappointment.
The company’s revenue also fell short of forecasts, coming in at just under $20 billion. While it was Boeing’s highest revenue since the pandemic began, it was about $360 million short of analyst consensus estimates.
Boeing tried to put the best possible spin on the disappointing results.
The company pointed out that this was the first full year of positive operating cash flow since the start of the 737 Max crisis. Boeing ended up bringing in $3.5 billion more money than it spent, and the company reaffirmed its 2023 expectation of positive operating cash flow of between $4.5 and $6.5 billion.
“Demand across our portfolio is strong and we remain focused on driving stability in our operations and supply chain to meet our commitments in 2023 and beyond,” CEO Dave Calhoun said in the company’s statement. “While challenges remain, we are well positioned and on track to restore our operational and financial strength.”
Shares of Boeing (BA) fell 2% in premarket trading according to the report.