2024

Spirit

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<p class="has-drop-cap">Boeing (NYSE: BA) reported its financial results for the <a aria-label="second quarter of 2024 (opens in a new tab)" href="https://s2.q4cdn.com/661678649/files/doc_financials/2024/q2/2024-06-Jun-30-8K-PR-Ex-99-1.pdf" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">second quarter of 2024</a>, revealing a challenging period marked by significant losses. <br><br>The company recorded a revenue of $16.9 billion, a 15% decline from $19.8 billion in the same quarter of 2023. The <a href="https://tokenist.com/investing/how-to-value-a-stock/" rel="noopener noreferrer nofollow" class="deco-link">GAAP loss per share</a> stood at ($2.33), while the core loss per share was ($2.90). Operating cash flow was negative at ($3.9) billion, and free cash flow was also in the red at ($4.3) billion.</p>
<p>The primary factors contributing to these results were lower commercial delivery volumes and losses on fixed-price defense development programs. Despite these setbacks, CEO Dave Calhoun emphasized the company’s ongoing efforts to strengthen its quality management system and its strategic acquisition of Spirit AeroSystems (NYSE: SPR), which is expected to close by mid-2025. <br><br>The company also announced <a aria-label="Mr. Calhoun's successor (opens in a new tab)" href="https://www.reuters.com/business/aerospace-defense/boeing-names-kelly-ortberg-new-ceo-2024-07-31/" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">Mr. Calhoun’s successor</a>, Kelly Ortberg, who will become its new CEO.</p>
<h3 id="boeing-revenue-dropped-notably-in-q2">Boeing Revenue Dropped Notably in Q2</h3>
<p>Boeing’s commercial airplane segment saw a notable decline, with revenues falling to $6.0 billion from $8.8 billion in the same quarter the previous year, a 32% drop. The segment also reported a loss from operations of ($715) million, compared to a loss of ($383) million in Q2 2023.</p>
<p>This downturn was attributed to reduced deliveries and increased period costs, including research and development expenses. The defense, space, and security segment also faced challenges, with revenues slightly decreasing to $6.0 billion from $6.2 billion and a significant operating margin decline to (15.2)% due to $1.0 billion in losses on fixed-price development programs.</p>
<p>When comparing Boeing’s current performance against expectations, the results fell short of analyst projections. The expected earnings per share (EPS) for the quarter were ($1.84), but the actual GAAP EPS came in at a more substantial loss of ($2.33).</p>
<p>Similarly, revenue expectations were set at $17.35 billion, but the company reported $16.9 billion, missing the mark by approximately $450 million. These discrepancies highlight the more significant-than-anticipated impact of the challenges Boeing faced, including supply chain constraints and lower commercial airplane deliveries.</p>
<p>The company’s performance metrics also showed considerable declines compared to the previous year. For instance, the operating margins decreased to (6.5)% from (0.5)% in Q2 2023. The net loss for the quarter was ($1.4) billion, a stark contrast to the ($149) million loss in the same period last year. <br><br>These figures underscore the severity of the operational challenges Boeing encountered, further exacerbated by ongoing issues in the defense sector, such as losses on the KC-46A and other fixed-price programs.</p>
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<h3 id="boeing-still-holds-a-robust-backlog-with-5-400-orders">Boeing Still Holds a Robust Backlog with 5,400 Orders</h3>
<p>Looking ahead, Boeing has provided guidance that reflects both cautious optimism and acknowledgment of the hurdles that remain. <br><br>The company plans to increase production rates for its 737 and 787 programs by the end of the year, aiming for 38 and 5 units per month, respectively. The acquisition of Spirit AeroSystems is a strategic move intended to bolster Boeing’s supply chain and production capabilities, although the transaction is not expected to close until mid-2025.</p>
<p>Boeing’s backlog remains robust at $516 billion, including over 5,400 commercial airplanes, which provides a cushion against short-term market fluctuations. The company also highlighted its comprehensive safety and quality plan submitted to the FAA, which is a critical step in restoring confidence and ensuring future operational stability.</p>
<p>However, Boeing’s substantial debt load, which increased to $57.9 billion from $47.9 billion due to new debt issuance, remains a concern that the company will need to manage carefully.</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe>
<p><em>Disclaimer: The author does not hold or have a position in any securities discussed in the article.</em></p>
<h3 id="br"><br></h3>
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/boeing-ba-reports-challenging-q2-2024-revenue-down-15-y-y/">Boeing (BA) Reports Challenging Q2 2024: Revenue Down 15% y/y</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Boeing (BA) Reports Challenging Q2 2024: Revenue Down 15% y/y

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