Boeing (BA), Losses Grew but Cash Flow is Positive...Recovery Signal On

▲ Boeing (BA)/AI-generated image

Despite larger-than-expected quarterly losses, Boeing (BA) has shown signs of recovery with improved cash flow and progress in aircraft certification.

Kelly Ortberg, Boeing CEO, stated in an interview with CNBC on July 28 (local time) that increased production led to higher revenue and improved cash flow. Boeing's quarterly loss was larger than market expectations. However, revenue exceeded forecasts. Free cash flow also recorded a surplus instead of the deficit the market had anticipated. The company maintained its free cash flow forecast for this year at $1 billion to $3 billion.

Ortberg emphasized that uncertainties surrounding production and certification are decreasing. The long-term performance outlook will also be presented again soon. He said, “The range of uncertainty is narrowing,” and “We will review our plans to provide investors with a better long-term outlook.”

Boeing has completed flight tests for both the 737-7 and 737-10. The 737-7 is expected to receive certification from the U.S. Federal Aviation Administration (FAA) soon. 737-10 certification will follow. These two models account for a large portion of Boeing's order backlog. The company plans to deliver these aircraft starting in 2027.

Additional costs were reflected in the Air Force One program. The design phase is complete, and aircraft modification and testing are underway. Defense sector revenue increased by 13% year-over-year. The T-7 trainer has entered its maximum production phase. The MQ-25 has also secured initial production approval. Ortberg also stated that the recurring quarterly losses in fixed-price programs have stabilized.

The 777X is scheduled to complete certification in the remainder of this year and begin deliveries in 2027. Ortberg assessed that demand from airlines is very strong. Contract negotiations and individual airline assignments are underway for the 200 aircraft promised by China. He predicted that contracts would be signed soon. Regarding the stock's sluggish performance, he said, “We must continue to demonstrate improved production and cash flow,” and “As performance accumulates, it will be reflected in the stock price.”

[Article Key Summary]

-Despite larger-than-expected quarterly losses, Boeing exceeded market forecasts in revenue and free cash flow.

-Flight tests for the 737-7 and 737-10 have been completed, and deliveries of major models, including the 777X, are planned for 2027.

-The free cash flow forecast for this year was maintained at $1 billion to $3 billion.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. This content should be interpreted for informational purposes only.*