Boeing Q4 loss: Is the company's future in jeopardy? What went wrong?

Boeing, one of the world's largest aircraft manufacturers, has posted a $663 million loss in the fourth quarter of 2022.

This loss comes despite a rebound in aircraft sales and deliveries which drove up revenue for the company. The loss was attributed to supply chain issues which have weighed on the company's results.

Airlines and Aircraft Manufacturers Status

Airlines and aircraft manufacturers have seen a sharp recovery in air travel, one of the most affected industries from the Covid pandemic.

However, Boeing's leaders have been hesitant to ramp up aircraft production until the supply chain has stabilized. The company is currently producing 31 of its 737 jets a month and plans to increase that to about 50 per month in 2025 or 2026.

Additionally, the company plans to raise the low production rate of the 787 Dreamliners to five each month towards the end of the year and to 10 per month in 2025 or 2026. Deliveries of these wide-body planes had been paused for around two years until this summer due to production flaws.

For the full year, Boeing had a loss of $5 billion despite a 7% increase in revenue to $66.6 billion. The adjusted loss per share for the fourth quarter was $1.75, compared to the expected earnings per share of 26 cents. The company's revenue for the fourth quarter was $19.98 billion, compared to the expected $20.38 billion.

The Boeing 2022 and the Future

Despite the loss, Boeing generated $3.1 billion in cash flow in the fourth quarter, which was higher than analyst forecasts.

Additionally, for the full year, the company generated $2.3 billion in cash flow, the most since 2018, before the second of two fatal 737 Max crashes that sparked a years-long crisis for the company.

The company's commercial aircraft unit generated $9.2 billion in sales in the fourth quarter, up 94% from a year earlier as deliveries jumped, but it still produced a loss due to abnormal costs and other expenses such as research and development.

Boeing's CEO, Dave Calhoun, stated in a memo to employees that:

"We're proud of how we closed out 2022, and despite the hurdles in front of us, we're confident in our path ahead. We have a robust pipeline of development programs, we're innovating for the future and we're increasing investments to prepare for our next generation of products."

The company reiterated its expectation to generate between $3 billion and $5 billion in free cash flow this year.

Overall, while the rebound in aircraft sales and deliveries is a positive development for Boeing, the company's loss in the fourth quarter highlights the ongoing challenges it faces in terms of supply chain issues and the need to ramp up production.

However, with a robust pipeline of development programs and increasing investments in next-generation products, the company remains optimistic about its future prospects.