Boeing stock falls on unexpected loss

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Boeing

seems to have turned the cash flow corner. That’s good news, but the company still couldn’t make a profit as earnings once again beat expectations, sending the stock tumbling on Wednesday.

Boeing

(ticker: BA) on Wednesday morning reported a fourth-quarter loss of $1.75 a share on sales of $20 billion.

Wall Street was looking for earnings per share of 17 cents on sales of $20 billion for Boeing. The shortfall was primarily due to special items totaling nearly $800 million, up about $550 million from the fourth quarter of 2021. Chief Financial Officer Brian West pointed to “abnormal costs” during the company’s earnings conference call, including ongoing supply chain issues.

The profit and loss account is “still a mess,” Vertical Research Partners analyst Rob Stallard wrote in a Wednesday report. The commercial aircraft, defense and loan units all missed its operating profit estimates. Quarterly free cash flow, however, at $3.1 billion, was in line with its forecast, and Stallard noted that Boeing paid off about $3 billion in debt during the quarter. It rates Hold stock and has a price target of $175 for Boeing stock.

The fourth quarter is the second consecutive quarter that Boeing has generated positive free cash flow.

Prior to today’s results, Boeing had generated positive free cash flow for only two of the past 14 quarters, following the onset of the 737 MAX debacle and the Covid-19 pandemic. Aircraft deliveries fell as airlines struggled to stay afloat amid falling demand for air travel.

Looking ahead, Boeing expects to generate between $3 billion and $5 billion in free cash flow in 2023. Wall Street currently forecasts $4.2 billion. Analysts expect the company to deliver around 600 planes, up from 480 delivered in 2022.

Many of those deliveries will end up in China, which has just started flying the 737 MAX again. Boeing ended the year with about 250 MAX jets in storage. About 140 of them are for Chinese customers, according to the company.

Boeing stock is down about 2.4% at midday. The S&P 500 and the Dow Jones Industrial Average are down about 1.1% and 0.9%, respectively.

On Wednesday, Boeing stock is up about 11% this year and about 48% over the past three months. The S&P 500 is up about 5% so far this year and about 6% over the past three months. The year-to-date and three-month change in the Dow Jones Industrial Average was 2% and 7%, respectively.

Write to Al Root at [email protected]