01—Abstract
Summary
Summary of the 10-Q filed July 26, 2023. Cited figures are marked; the original filing is the authoritative source.
Boeing Co. (BA) reported a net loss of $574 milliona for the first six months of 2023, a significant improvement from the $1,082 million net loss in the same period of 2022.
This improvement was driven by increased revenues across all segments, particularly Commercial Airplanes (BCA) due to higher 787 and 737 deliveries, and a reduction in charges on development programs within Defense, Space & Security (BDS). Despite the improved top-line performance and reduced net loss, the company continues to grapple with challenges. Operating margins remain negative for the consolidated entity.
BCA reported a substantial operating loss, impacted by abnormal production costs on the 787 and 777X programs. While BDS saw reduced losses compared to the prior year, it incurred significant losses on development programs. Global Services (BGS) was the primary driver of profitability, showing strong earnings growth.
Liquidity remains a concern, with cash and cash equivalents decreasing significantly from the prior year-end, although the company highlights available borrowing capacity. The company's substantial backlog provides a degree of visibility, but risks related to supply chain disruptions, production rate increases, and program delays, particularly for the 737 MAX and 777X, could impact future revenue realization and profitability.
02—Key points
Key Highlights
- Total revenues increased by 22.8% to $37.7 billion for the first six months of 2023 compared to $30.7 billion in the prior year, driven by strong performance across all segments.
- Net loss attributable to shareholders narrowed to $574 million for the first six months of 2023, an improvement from $1,082 million in the same period of 2022.
- Commercial Airplanes (BCA) segment revenues increased significantly, primarily due to higher 787 and 737 deliveries, but the segment continued to report operating losses ($998 million for the six months).
- Defense, Space & Security (BDS) segment revenues saw an increase, and its operating loss narrowed, benefiting from lower charges on development programs.
- Global Services (BGS) segment demonstrated robust growth in both revenues and operating earnings, driven by commercial and government services.
- Cash and cash equivalents decreased to $7.3 billion at June 30, 2023, from $14.6 billion at December 31, 2022, though the company notes available borrowing capacity.
- The company's total backlog increased to $439.6 billion, providing significant future revenue visibility, but with uncertainties regarding delivery timing for key programs like the 737 and 777X.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q2 FY2023, Boeing Co lost $0.01.
- Revenue$19.75B100.0%
- Cost of revenue−$17.81B90.2%
- Gross profit$1.94B9.8%
- Operating costs−$2.04B10.3%
- Operating income−$99.0M0.5%
- Interest, other & tax−$50.0M0.3%
- Net income−$149.0M0.8%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2023filed July 26, 2023Financial Statements
Q2 FY2023 against Q2 FY2022
| Line item | Q2 FY2023Q2 FY2022 | Change |
|---|---|---|
| Revenue | $19.75B$16.68B | +18.4% |
| Cost of Revenue | $17.81B$14.55B | +22.4% |
| Gross Profit | $1.94B$2.13B | −8.9% |
| R&D Expenses | $797.00M$698.00M | +14.2% |
| Operating Income | -$99.00M$780.00M | −112.7% |
| Net Income | -$149.00M$193.00M | −177.2% |
| EPS (Basic) | $-0.25$0.32 | −178.1% |
| EPS (Diluted) | $-0.25$0.32 | −178.1% |
| Shares Outstanding (Basic) | 605.20M593.70M | +1.9% |
| Shares Outstanding (Diluted) | 605.20M596.10M | +1.5% |
05—Questions
Frequently Asked Questions
What is Boeing's financial performance for the first half of 2023 compared to the same period in 2022?
Boeing reported a net loss of $574 million for the first six months of 2023, which is an improvement from the $1,082 million net loss reported for the first six months of 2022. Total revenues increased to $37.7 billion from $30.7 billion, driven by higher deliveries in Commercial Airplanes and increased sales in Defense, Space & Security and Global Services.
What are the key drivers of the revenue increase in the Commercial Airplanes segment?
The Commercial Airplanes (BCA) segment's revenue increase was primarily driven by higher 787 deliveries, as the prior year was impacted by a delivery pause, and an increase in 737 deliveries. Despite revenue growth, the segment continued to report operating losses due to abnormal production costs associated with the 787 and 777X programs.
What is the current status of Boeing's liquidity and cash flow?
Boeing's cash and cash equivalents decreased from $14.6 billion at the end of 2022 to $7.3 billion at June 30, 2023. However, the company reported positive net cash provided by operating activities of $2.6 billion for the first six months of 2023, a significant improvement from the $3.1 billion used in the prior year. Boeing also highlighted $12.0 billion in unused borrowing capacity on its revolving credit agreements, indicating continued access to liquidity.
Are there any significant ongoing risks or challenges facing Boeing?
Yes, Boeing faces several risks. These include ongoing supply chain disruptions, labor instability, and inflationary pressures impacting production. Significant challenges remain in the Commercial Airplanes segment due to abnormal production costs on the 787 and 777X, and delays in certification or entry into service for new models like the 737-7 and 737-10. The Defense, Space & Security segment continues to incur losses on development programs. The company also has a substantial backlog, but the timing of revenue recognition from this backlog is subject to uncertainties regarding production rates and delivery schedules.
06—Continue