Boeing cash gain dulls pain from $5.5b Dreamliner costs

Bloomberg

Boeing Co. generated cash for the first time since early 2019 as rising 737 Max deliveries helped bolster company finances against mounting 787 Dreamliner losses.
Wall Street was caught by surprise by the $494 million in fourth-quarter free cash flow, disclosed in an earnings statement Wednesday. Analysts had expected an outflow of about $1 billion.
Boeing has also hiked output of the 737 to 26 jets a month, up from 19 in October, Chief Executive Officer Dave Calhoun said in a note to employees. That’s another sign that the planemaker may be turning around its operations after burning through more than $31 billion during a nearly three-year-long slump marked by the Max’s grounding, the Covid-19 pandemic and a spate of quality lapses.
But Boeing’s recovery is far from complete. The planemaker reported $5.5 billion in total costs to cover rising factory and customer expenses for the Dreamliner. Boeing took write-offs on the KC-46 aerial tanker and the global services division as well.
The 787 program’s profits have been wiped out as Boeing pays airlines for service they’ve lost because of delivery disruptions. The company hasn’t handed over any Dreamliners since June as it addresses structural imperfections on the roughly 100 aircraft in its system.
This effort continues to impact our deliveries and our financial results — but we are fully confident it is the right thing to do,” Calhoun’s memo said. “I view the financial impacts of this work as a long-term investment in a program that has significant runway ahead.”
The company reported a fourth-quarter loss of $7.69 a share on the 787 charges. Analysts expected a four-cent loss, according to the average of estimates compiled by Bloomberg. Revenue fell to $14.79 billion, while analysts projected $16.7 billion.
Boeing shares were little changed before the start of regular trading in New York.