01—Abstract
Summary
Summary of the 10-Q filed October 25, 2023. Cited figures are marked; the original filing is the authoritative source.
Boeing's third-quarter 2023 results show a continued trend of revenue growth across all segments, driven by higher aircraft deliveries and commercial services.
Despite this top-line improvement, the company reported a net loss attributable to shareholders of $2.2 billiona for the nine months ended September 30, 2023, and $1.6 billion for the third quarter. This loss is largely influenced by ongoing challenges in the Defense, Space & Security (BDS) segment, particularly with fixed-price development programs experiencing significant unfavorable contract adjustments. The Commercial Airplanes (BCA) segment also faces headwinds from production issues and abnormal production costs, notably on the 787 and 777X programs, though deliveries have increased.
Operationally, Boeing saw improved cash flow from operating activities, reaching $2.6 billionb for the first nine months of 2023, a substantial increase from the prior year. However, investing activities used more cash, and financing activities also saw increased outflows due to debt repayments.
The company's liquidity remains strong with $6.8 billionc in cash and short-term investments, and $10 billion in unused borrowing capacity. Management is focused on stabilizing the supply chain, increasing production rates, and managing program costs to return to profitability.
02—Key points
Key Highlights
- Total revenues increased by 19% to $55.8 billion for the first nine months of 2023 and by 13% to $18.1 billion for the third quarter, driven by higher deliveries across all segments.
- Despite revenue growth, Boeing reported a net loss attributable to shareholders of $2.2 billion for the nine months ended September 30, 2023, and $1.6 billion for the third quarter.
- The Defense, Space & Security (BDS) segment continued to be a drag on profitability, with a loss from operations of $1.7 billion for the nine months and $0.9 billion for the quarter, significantly impacted by unfavorable cumulative contract adjustments on development programs.
- Commercial Airplanes (BCA) segment experienced higher deliveries of 787 and 737 aircraft, contributing to revenue growth, but still reported a loss from operations of $1.7 billion for the nine months and $0.7 billion for the quarter, burdened by abnormal production costs.
- Global Services (BGS) remained the sole profitable segment, with earnings from operations of $2.5 billion for the nine months and $0.8 billion for the quarter, driven by strong commercial services revenue.
- Operating cash flow improved significantly to $2.6 billion for the nine months ended September 30, 2023, from $0.1 billion in the prior year.
- The company's total backlog increased to $469.2 billion as of September 30, 2023, indicating strong future demand, although conversion to revenue remains subject to production ramp-up and delivery timelines.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q3 FY2023, Boeing Co lost $0.09.
- Revenue$18.10B100.0%
- Cost of revenue−$16.94B93.6%
- Gross profit$1.17B6.4%
- Operating costs−$1.97B10.9%
- Operating income−$808.0M4.5%
- Interest, other & tax−$828.0M4.6%
- Net income−$1.64B9.0%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2023filed October 25, 2023Financial Statements
Q3 FY2023 against Q3 FY2022
| Line item | Q3 FY2023Q3 FY2022 | Change |
|---|---|---|
| Revenue | $18.10B$15.96B | +13.5% |
| Cost of Revenue | $16.94B$16.77B | +1.0% |
| Gross Profit | $1.17B-$815.00M | +242.9% |
| R&D Expenses | $958.00M$727.00M | +31.8% |
| Operating Income | -$808.00M-$2.79B | +71.1% |
| Net Income | -$1.64B-$3.27B | +50.0% |
| EPS (Basic) | $-2.70$-5.49 | +50.8% |
| EPS (Diluted) | $-2.70$-5.49 | +50.8% |
| Shares Outstanding (Basic) | 606.90M596.00M | +1.8% |
| Shares Outstanding (Diluted) | 606.90M596.00M | +1.8% |
05—Questions
Frequently Asked Questions
What is Boeing's financial performance for the third quarter of 2023?
Boeing reported increased revenues in the third quarter of 2023 to $18.1 billion, up from $15.9 billion in the same quarter of 2022. However, the company incurred a net loss of $1.6 billion for the quarter, compared to a net loss of $3.3 billion in the prior year's third quarter. This indicates ongoing challenges impacting profitability despite revenue growth.
What are the main factors contributing to Boeing's net losses?
The primary drivers of Boeing's net losses are significant unfavorable adjustments related to long-term fixed-price development programs in the Defense, Space & Security (BDS) segment, as well as abnormal production costs and supply chain issues impacting the Commercial Airplanes (BCA) segment, particularly with the 787 and 777X programs. These factors, along with ongoing R&D investments, are weighing on overall profitability.
How is Boeing's cash flow situation?
Boeing has shown significant improvement in operating cash flow, generating $2.6 billion for the nine months ended September 30, 2023, a substantial increase from $0.1 billion in the same period of 2022. This is a positive sign for liquidity. The company maintains a strong liquidity position with $6.8 billion in cash and cash equivalents and $10 billion in available credit facilities, indicating it can meet its short-term obligations.
What is the outlook for Boeing's Commercial Airplanes (BCA) segment?
The BCA segment saw increased deliveries of 787 and 737 aircraft, contributing to revenue growth. However, the segment continues to report operating losses due to abnormal production costs, primarily on the 787 and 777X programs, and ongoing production challenges. The company is working to stabilize the supply chain and ramp up production rates, but delivery timelines for certain models and regulatory approvals for new variants remain areas of focus.
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