Summary
Boeing Co. reported a net loss of $793 million for the six months ended June 30, 2019, a significant shift from a net earning of $4,673 million in the prior year period. This downturn is largely attributable to a substantial earnings charge of $5,610 million recorded in the second quarter related to customer concessions and disruptions caused by the 737 MAX grounding. Total revenues also saw a considerable decrease of $8,972 million year-over-year, driven by lower deliveries across segments, particularly in Commercial Airplanes, exacerbated by the aforementioned charge. The grounding of the 737 MAX has had a profound impact, leading to reduced production rates, increased production costs, and a significant hit to operating margins. While the Defense, Space & Security and Global Services segments showed revenue growth, this was not enough to offset the steep decline in Commercial Airplanes. The company's liquidity remains a concern, with net cash provided by operating activities decreasing significantly due to increased inventory related to the 737 MAX production halt and lower advances. Boeing has taken steps to manage its financial position, including suspending its share repurchase program and increasing its debt. Despite these challenges, Boeing maintains a substantial backlog of $474,251 million. The company is actively working with regulatory authorities to address the 737 MAX issues and expects regulatory approval for its return to service in early Q4 2019, with a gradual ramp-up of production thereafter. Investors should closely monitor the timing and conditions of the 737 MAX's return to service, potential further cost impacts, and the company's ability to navigate ongoing regulatory investigations and legal proceedings.
Financial Highlights
55 data points| Revenue | $15.75B |
| Cost of Revenue | $17.81B |
| Gross Profit | -$2.06B |
| R&D Expenses | $826.00M |
| Operating Income | -$3.38B |
| Net Income | -$2.94B |
| EPS (Basic) | $-5.21 |
| EPS (Diluted) | $-5.21 |
| Shares Outstanding (Basic) | 565.30M |
| Shares Outstanding (Diluted) | 564.70M |
Key Highlights
- 1Net loss of $793 million for the first six months of 2019, a stark contrast to a $4,673 million profit in the prior year, primarily due to a significant charge related to the 737 MAX grounding.
- 2Total revenues decreased by $8,972 million to $38,668 million for the first six months of 2019, largely driven by a $5,610 million charge in Q2 related to 737 MAX customer concessions and delivery disruptions.
- 3Commercial Airplanes (BCA) segment experienced a substantial operating loss of $3,773 million for the six months, impacted by the 737 MAX grounding, lower deliveries, and increased production costs.
- 4Defense, Space & Security (BDS) and Global Services (BGS) segments showed revenue growth, increasing by $642 million and $1,115 million respectively for the six months, driven by derivative aircraft, satellites, weapons, and the KLX acquisition for BGS.
- 5Net cash provided by operating activities significantly decreased to $2.2 billion from $7.8 billion in the prior year, impacted by increased inventory due to the 737 MAX production halt and lower advances.
- 6Boeing has suspended its share repurchase program and increased its debt, issuing $1.5 billion in March and $3.5 billion in May 2019.
- 7The company incurred a large earnings charge of $5,610 million in Q2 2019 related to estimated potential concessions and other considerations to customers impacted by the 737 MAX grounding and delivery delays.