10-QPeriod: Q1 FY2021

BOEING CO Quarterly Report for Q1 Ended Mar 31, 2021

Filed April 28, 2021For Securities:BABA-PA

Summary

Boeing Company (BA) reported its first quarter 2021 financial results, showing continued challenges from the COVID-19 pandemic and the residual impacts of the 737 MAX grounding. Total revenues decreased to $15.2 billion from $16.9 billion in the prior year's quarter, primarily driven by lower Commercial Airplanes (BCA) and Global Services (BGS) revenues. The company reported a net loss attributable to shareholders of $537 million ($0.92 per share) for the quarter, an improvement from the $628 million loss ($1.11 per share) in the first quarter of 2020. Despite the ongoing difficulties, the Defense, Space & Security (BDS) segment showed revenue growth. Liquidity remains a key focus, with net cash used by operating activities at $3.4 billion for the quarter. Boeing took steps to manage its cash position, including issuing new debt and repaying existing loans, resulting in a total debt balance of $63.6 billion. The company's outlook for commercial air travel recovery is still projected for 2023-2024, with continued uncertainty regarding the pace and extent of recovery. Management is actively pursuing business transformation initiatives to improve efficiency and resilience.

Financial Highlights

51 data points
Beta

Revenue

$15.22B

9.3% Gross Margin

Net Income

-$537.00M

-3.5% Net Margin

EPS (Diluted)

$-0.92

Total Assets

$150.03B

Cash & Equivalents

$7.15B

Free Cash Flow

-$3.68B

Financial Statements
Beta
Revenue$15.22B
Cost of Revenue$13.81B
Gross Profit$1.41B
R&D Expenses$499.00M
Operating Income-$83.00M
Net Income-$537.00M
EPS (Basic)$-0.92
EPS (Diluted)$-0.92
Shares Outstanding (Basic)585.00M
Shares Outstanding (Diluted)585.00M

Key Highlights

  • 1Total revenues declined by 10% year-over-year to $15.2 billion, largely due to lower sales in the Commercial Airplanes and Global Services segments.
  • 2The company reported a net loss attributable to Boeing shareholders of $537 million, an improvement from the $628 million loss in the same period last year, resulting in a diluted loss per share of $0.92.
  • 3Defense, Space & Security (BDS) segment revenues increased by 19% to $7.2 billion, driven by the KC-46A Tanker program and favorable contract adjustments.
  • 4Net cash used in operating activities was $3.4 billion, reflecting continued inventory build-up in commercial aircraft programs, particularly the 787.
  • 5Boeing issued $9.8 billion in new debt and used the proceeds to repay outstanding term loans, maintaining its total debt balance at $63.6 billion.
  • 6The 737 MAX program saw increased deliveries as more jurisdictions approved its return to service, though the aircraft remains grounded in some non-U.S. jurisdictions.
  • 7Inventory levels, particularly for the 787 program, increased due to production issues and rework, impacting cash flow.

Frequently Asked Questions

The primary drivers of the revenue decline were lower deliveries in the Commercial Airplanes (BCA) segment, particularly the 787 program, and decreased commercial services revenue in the Global Services (BGS) segment, both significantly impacted by the ongoing effects of the COVID-19 pandemic and residual impacts from the 737 MAX grounding.

Boeing is actively managing its liquidity through several measures, including issuing new debt to repay existing obligations, reducing operating expenses, suspending dividends, and implementing business transformation initiatives aimed at improving efficiency. The company also maintains significant unused borrowing capacity on its revolving credit agreements.

Boeing continues to expect commercial air travel to return to 2019 levels in 2023 to 2024, with a gradual return to long-term trend growth thereafter. However, significant uncertainty remains regarding the pace of recovery, which is dependent on factors such as COVID-19 infection rates, vaccine distribution, and government travel restrictions. The narrow-body market is expected to recover faster than the wide-body market.

The BCA segment faces challenges including lower aircraft deliveries due to production issues (especially for the 787), ongoing impact of the 737 MAX grounding in certain regions, customer deferrals and cancellations influenced by the pandemic's effect on airline financial health, and the general uncertainty in global air travel demand. The 777X program also continues to face development and certification risks.