Boeing surprised Wall Street with operating cash flow in Q2 preparing to restart 787 deliveries
Boeing on Wednesday Jul. 27 surprised Wall Street by generating cash from operations in the second quarter and stuck to its cash flow goal for the year in a sign the jetmaker was gradually overcoming costly production snarls.
Shares of the U.S. planemaker rose 2.7% as 737 MAX jet deliveries more than doubled and Chief Executive Dave Calhoun said Boeing was in the “final stages” of preparing to restart 787 Dreamliner deliveries.
While the company posted a wider-than-expected adjusted loss due to charges, operating cash flow came in at $81 million in the quarter. Analysts had expected a cash burn of $480.33 million, as per Refinitiv data.
“While Q2 results were still far from perfect, this is Boeing’s cleanest quarter in a while,” Melius Research analyst Robert Spingarn said.
Boeing’s cash flow has become a focal point for investors, as the planemaker borrowed heavily to wade through successive crises caused by the 737 MAX grounding and the pandemic. The company’s debt stood at $57.2 billion as of June 30.
Some analysts were skeptical about Boeing achieving its cash flow goals this year, as the company works through industry-wide supply-chain disruptions and labor shortages that have hobbled production.
“Even as we navigate a difficult environment, we are making progress across key programs and are beginning to hit significant milestones,” Chief Executive Dave Calhoun said in a letter to employees.
A resumption in deliveries of the wide-body Dreamliner would mark a significant milestone for Boeing as it looks to turn around its fortunes amid a resurgence in air travel.
Deliveries of the jet have been halted for more than a year by inspections and repairs to fix manufacturing flaws in an industrial headache costing the company about $5.5 billion.
The planemaker took a fresh charge of $240 million related to its commercial crew and unmanned aircraft refueling programs at its defense, space & security unit.
The business, which was also weighed down by weak sales, has been a pain point for Boeing in recent years, delaying the company’s recovery.
“We continue to work through hurdles on our fixed-price development programs amidst a challenging macro-economic environment,” Calhoun added.
Boeing posted a core loss of 37 cents per share in the quarter through June, wider than analysts’ estimates of a loss of 14 cents per share.
Revenue fell about 2% to $16.68 billion, missing expectations of $17.57 billion, as per Refinitiv data.
Reuters.com by Abhijith Ganapavaram in Bengaluru and Rajesh Kumar Singh in Chicago; Editing by Saumyadeb Chakrabarty