01—Abstract
Summary
Summary of the 10-Q filed April 28, 2021. Cited figures are marked; the original filing is the authoritative source.
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 billiona 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 billionb 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.
02—Key points
Key Highlights
- Total revenues declined by 10% year-over-year to $15.2 billion, largely due to lower sales in the Commercial Airplanes and Global Services segments.
- The 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.
- Defense, Space & Security (BDS) segment revenues increased by 19% to $7.2 billion, driven by the KC-46A Tanker program and favorable contract adjustments.
- Net cash used in operating activities was $3.4 billion, reflecting continued inventory build-up in commercial aircraft programs, particularly the 787.
- Boeing 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.
- The 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.
- Inventory levels, particularly for the 787 program, increased due to production issues and rework, impacting cash flow.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q1 FY2021, Boeing Co lost $0.04.
- Revenue$15.22B100.0%
- Cost of revenue−$13.81B90.7%
- Gross profit$1.41B9.3%
- Operating costs−$1.49B9.8%
- Operating income−$83.0M0.5%
- Interest, other & tax−$454.0M3.0%
- Net income−$537.0M3.5%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2021filed April 28, 2021Financial Statements
Q1 FY2021 against Q1 FY2020
| Line item | Q1 FY2021Q1 FY2020 | Change |
|---|---|---|
| Revenue | $15.22B$16.91B | −10.0% |
| Cost of Revenue | $13.81B$16.77B | −17.7% |
| Gross Profit | $1.41B$140.00M | +906.4% |
| R&D Expenses | $499.00M$672.00M | −25.7% |
| Operating Income | -$83.00M-$1.35B | +93.9% |
| Net Income | -$537.00M-$628.00M | +14.5% |
| EPS (Basic) | $-0.92$-1.11 | +17.1% |
| EPS (Diluted) | $-0.92$-1.11 | +17.1% |
| Shares Outstanding (Basic) | 585.00M565.40M | +3.5% |
| Shares Outstanding (Diluted) | 585.00M565.40M | +3.5% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Boeing's revenue decline in Q1 2021?
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.
How is Boeing managing its liquidity given the negative operating cash flow?
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.
What is Boeing's outlook for the commercial aviation market recovery?
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.
What are the main challenges facing the Commercial Airplanes (BCA) segment?
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.
06—Continue