A rebound in commercial jet deliveries boosted Boeing’s revenue for the fourth quarter of 2022 but lingering supply chain woes and a struggling defense business unit led the company to record a net loss of $663 million.
The company’s revenue totaled $20 billion for the final quarter of 2022 and $66.6 billion for the year, according to Boeing’s Q4 earnings summary, but its commercial and defense units still recorded losses. Boeing said its commercial business lost $626 million during the quarter and its newly reorganized defense unit logged a loss of $112 million.
The company lost a total of $5 billion in 2022, a significant increase over 2021 that showed losses of nearly $4.3 billion. Losses per share for the year were also higher, totaling $8.30 in 2022 compared to $7.15 in 2021.
Still, the earnings summary shows the company’s defense sector may be making a turn after hemorrhaging losses in recent quarters, with the unit ending $2.8 billion in the red in Q3 of 2022.
“We felt the operational impact of supply chain constraints and labor instability,” Chief Financial Officer Brian West said of the defense unit losses on the company’s earnings call.
“We know the supply chain is going to be tough and constrained” in the year ahead, Chief Executive Officer Dave Calhoun said. “But we also believe that we control that environment and it’s our job to get ahead of it,” he added.
Boeing’s earnings also show a recovery in commercial aviation, with the company delivering 480 jets in 2022 compared with 340 in 2021.
The company’s backlog grew $404 billion in 2022, which includes orders for over 4,500 commercial aircraft.
Calhoun stated that Boeing exceeded its target of 375 737 aircraft deliveries in the year for a total of 387. The company expects that it will build 31 of the aircraft per month for the foreseeable future, ramping up production to 50 per month between 2025 and 2026, according to the earnings summary.
Greater demand for commercial travel contributed to a free cash flow of $2.3 billion, which Calhoun called a “key metric” for the company.
“This helped us generate positive full-year cash flow for the first time since 2018,” Calhoun said, referencing the company’s crisis over its 737 MAX jet.
Boeing executives have been open about their goal to generate positive commercial cash flow, a crucial tool to help the company retire its hefty debt of $57 billion.
“The overall plan continues to be deliver airplanes, generate cash, pay down debt,” West said.
Boeing is projecting an even better cash flow for 2023 between $3 billion and $5 billion, West added. By 2025 or 2026, the company is aiming to get to a free cash flow of $10 billion.
Citing the MAX’s return to China, Calhoun called the development an “indication of this overall improvement in our business” combined with reviving production and climbing orders for the jet. “It's safe and it's the most reliable of the airplane fleets,” he said.
Though the MAX is flying again, the company’s woes with the aircraft may not be over. Boeing is set to be arraigned in federal court tomorrow on a felony charge connected to the MAX crashes that killed 346 people, Reuters reported Jan. 19.