In the next 30 minutes, Boeing discusses it’s fourth quarter financial results via an earnings call, with the 737 MAX issues overshadowing this at present. Follow our live coverage.
AviationSource will be noting observations made in the manufacturer’s earnings call today, so be sure to keep up to date on this as they come in.
Without further ado, let’s get into it…
The Problems At Hand…
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Today’s fourth-quarter earnings will be an interesting indicator of how much money the Boeing 737 MAX issue with the door plugs have cost the American planemaker.
Earlier this month, Alaska Airlines flight AS1282 had to make an emergency landing in Portland following one of the inoperable doors separating from the airplane.
This resulted in the temporary groundings of the MAX 9 variant that had this setup on the aircraft, which included operators such as Alaska Airlines, United Airlines, Turkish Airlines & Copa Airlines.
The Federal Aviation Administration (FAA) also said that they would increase oversight into the production of the aircraft type, which involved the rejection of production expansion of the aircraft family until all safety obligations had been met.
As well as the 737 MAX, Boeing will also be providing updates around the whole of it’s commercial aircraft wing, where we will find out additional updates within this too.
When the results get released, you will see them on this article, as well as any further observations made by the American planemaker. Be sure to keep refreshing the article as live updates come in!
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Financials Disclosed…
Before the earnings call today, Boeing released the fourth-quarter results, which are as follows:
| Table 1. Summary Financial Results | Fourth Quarter | Full Year | ||||||||||||||||||||||||||||||||||||
| (Dollars in Millions, except per share data) | 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||||||||||||||||||||||||
| Revenues | $22,018 | $19,980 | 10 % | $77,794 | $66,608 | 17 % | ||||||||||||||||||||||||||||||||
| GAAP | ||||||||||||||||||||||||||||||||||||||
| Earnings/(loss) from operations | $283 | ($345) | NM | ($773) | ($3,519) | NM | ||||||||||||||||||||||||||||||||
| Operating margins | 1.3 | % | (1.7) | % | NM | (1.0) | % | (5.3) | % | NM | ||||||||||||||||||||||||||||
| Net loss | ($30) | ($663) | NM | ($2,242) | ($5,053) | NM | ||||||||||||||||||||||||||||||||
| Loss per share | ($0.04) | ($1.06) | NM | ($3.67) | ($8.30) | NM | ||||||||||||||||||||||||||||||||
| Operating cash flow | $3,381 | $3,457 | (2) % | $5,960 | $3,512 | 70 % | ||||||||||||||||||||||||||||||||
| Non-GAAP* | ||||||||||||||||||||||||||||||||||||||
| Core operating earnings/(loss) | $90 | ($642) | NM | ($1,829) | ($4,662) | NM | ||||||||||||||||||||||||||||||||
| Core operating margins | 0.4 | % | (3.2) | % | NM | (2.4) | % | (7.0) | % | NM | ||||||||||||||||||||||||||||
| Core loss per share | ($0.47) | ($1.75) | NM | ($5.81) | ($11.06) | NM | ||||||||||||||||||||||||||||||||
“While we report our financial results today, our full focus is on taking comprehensive actions to strengthen quality at Boeing, including listening to input from our 737 employees that do this work every day,” said Dave Calhoun, Boeing president and chief executive officer.
“As we move forward, we will support our customers, work transparently with our regulator and ensure we complete all actions to earn the confidence of our stakeholders.”
The main topic of conversation has been understandably about the 737 MAX, with Boeing saying the following on this in the financial results:
“Commercial Airplanes fourth quarter revenue increased to $10.5 billion driven by higher deliveries and favorable mix (Table 4). Operating margin of 0.4 percent also reflects improved performance and lower abnormal costs.”
“The company continues to cooperate transparently with the FAA following the Alaska Airlines Flight 1282 accident involving a 737-9.”
“Commercial Airplanes is taking immediate actions to strengthen quality on the 737 program, including requiring additional inspections within its factory and at key suppliers, supporting expanded oversight from airline customers and pausing 737 production for one day to refocus its employees on quality.”
“The company has also appointed an outside expert to lead an in-depth independent assessment of Commercial Airplanes’ quality management system, with recommendations provided directly to Calhoun and the Aerospace Safety Committee of Boeing’s Board of Directors.”
“The 737 program continues to deliver airplanes and its production rate is now at 38 per month. The 787 program production rate is now at five per month.”
“During the quarter, Commercial Airplanes booked 611 net orders, including 411 737, 98 777X, and 83 787 airplanes, began certification flight testing on the 737-10, and resumed production on the 777X program.”
“Commercial Airplanes delivered 157 airplanes during the quarter and backlog included over 5,600 airplanes valued at $441 billion.”
Breakdown of this is below:
| Table 4. Commercial Airplanes | Fourth Quarter | Full Year | ||||||||||||||||||||||||||||||||||||
| (Dollars in Millions) | 2023 | 2022 | Change | 2023 | 2022 | Change | ||||||||||||||||||||||||||||||||
| Deliveries | 157 | 152 | 3 % | 528 | 480 | 10 % | ||||||||||||||||||||||||||||||||
| Revenues | $10,481 | $9,271 | 13 % | $33,901 | $26,026 | 30 % | ||||||||||||||||||||||||||||||||
| Earnings/(loss) from operations | $41 | ($603) | NM | ($1,635) | ($2,341) | NM | ||||||||||||||||||||||||||||||||
| Operating margins | 0.4 | % | (6.5) | % | NM | (4.8) | % | (9.0) | % | NM | ||||||||||||||||||||||||||||
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LIVE: The Call With Investors…
Onwards to the earnings call at 3:30pm UK time. Keep refreshing for updates.
UPDATE #1 @ 1535 UK time – Boeing started out their financial earnings call discussing the focus on safety and quality enhancements in the wake of Alaska Airlines flight AS1282.
UPDATE #2 @ 1535 UK time – CEO Dave Calhoun relays apology once again to Alaska Airlines and the customers of the MAX 9 for the incident involving AS1282.
UPDATE #3 @ 1536 UK time – Calhoun accepts that Boeing is responsible regardless what happens in the investigation. Praises the crew onboard #AS1282 for their efforts during that difficult flight.
UPDATE #4 @ 1536 UK time – “We understand why they are angry and we will do everything to earn their confidence”, Calhoun says.
UPDATE #5 @ 1537 UK time – All Boeing 737 MAX 9 operators affected are returning their aircraft to service, Calhoun confirms.
UPDATE #6 @ 1538 UK time – Calhoun takes the time to discuss what the American planemaker has done, which included a historic stand-down of 10,000 team members to go over safety and quality assurance.
UPDATE #7 @ 1539 UK time – Calhoun confirms that production rates of the MAX will remain at 38 per month until the FAA is happy about new practices implemented by Boeing.
UPDATE #8 @ 1540 UK time – On financial outlook for 2024: “Now is not the time for that”, Calhoun says.
UPDATE #9 @ 1541 UK time – Engineering excellence will now be at the foundation of things for the American planemaker, with Calhoun promising full transparency moving forward. “We have confidence in you [The workers], and we have confidence in Boeing”.
UPDATE #10 @ 1543 UK time – Calhoun concludes his speech, and hands over to Brian West for financials.
UPDATE #11 @ 1543 UK time – Boeing gives an overall summary of the fourth-quarter results. Revenues increased by $2bn to $22bn from $20bn compared to the same period last year.
UPDATE #12 @ 1543 UK time – Overall update provided on the Commercial Airplanes wing, securing 611 net orders last year, meaning the backlog is now valued at $441bn.
Within this, Boeing have confirmed the restart of program production for the 777X, as well as beginning the certification flight testing process for the MAX 10.
UPDATE #13 @ 1544 UK time – Of the 157 Commercial aircraft delivered last quarter, 110 were MAXs.
UPDATE #14 @ 1545 UK time – Boeing ended the quarter with 200 MAXs in their inventory currently.
UPDATE #15 @ 1546 UK time – 23 Dreamliners delivered in 4Q23.
UPDATE #16 @ 1547 UK time – 60 Dreamliners still in inventory, 50 of which need reworks.
UPDATE #17 @ 1547 UK time – Boeing 777X entry-into-service date remains unchanged, confirms Boeing CFO Brian West.
UPDATE #18 @ 1549 UK time – West moves on to Defense, Space & Security as well as Global Services programs. Operating margin for DSS remains challenging, but GS remains strong.
UPDATE #19 @ 1551 UK time – Boeing has around $52.3bn in consolidated debt, which remains unchanged at this point.
UPDATE #20 @ 1552 UK time – Boeing has given an overview of their full-year financial results, which has seen revenue increase from $66.6bn to $77.8bn, a strong improvement on the year previous.
UPDATE #21 @ 1552 UK time – Free cash flow has increased from $2.3bn to $4.4bn.
UPDATE #22 @ 1553 UK time – Backlog is strong and growing but continuing the theme laid out today that no financial outlook for 2024 will be provided. Each delivery will be completed side by side with the FAA.
UPDATE #23 @ 1555 UK time – Calhoun now concludes the earnings call. “Boeing will get better, I am in confident with that. We will address everything that comes from this”.
UPDATE #24 @ 1556 UK time – 129 MAXs have been returned to service so far, Calhoun confirms.
UPDATE #25 @ 1601 UK time – Calhoun on removing MAX 7 exemption: “It’s the right thing to do, and for aviation too”.
UPDATE #26 @ 1603 UK time – Investors asking about MAX 7 certification, with Brian West giving a very tough but fair statement of “it will be ready when it’s ready”, as well as once issues with FAA are sorted.
UPDATE #27 @ 1613 UK time – Calhoun on 787 backlog: “Program is going great, and the backlog is big!”
UPDATE #28 @ 1621 UK time – Proceedings concluding here at the Boeing earnings call. Thank you for following with us!
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