Boeing gains after cash flow beats estimates, production guidance reaffirmed
Boeing stock (BA) rose on Wednesday after the company announced a narrower-than-expected loss and revenue that topped estimates for the second quarter while reaffirming its profit and delivery guidance.
Boeing reported top-line revenue of $19.75 billion, beating the Street's estimate of $18.53 billion. The company reported an adjusted loss per share of $0.82, narrower than the $0.85 loss expected. Boeing’s Q2 revenue figure was 18% higher than a year ago.
Boeing said the results reflected higher commercial volume and lower margins in its defense business.
On the profitability front, Boeing reported operating cash flow of $2.875 billion and free cash flow of $2.579 billion. In the same quarter last year, the company reported negative free cash flow of $182 million.
The reversal comes as the plane maker collects revenue from new orders and deliveries.
"We had a solid second quarter with improved deliveries and strong free cash flow generation," Dave Calhoun, Boeing CEO and president, said in a statement. "We are well positioned to meet the operational and financial goals we set for this year and for the long term. With demand strong, we're steadily increasing our production rates across key programs and growing investments in our people, products and technologies."
Boeing also reaffirmed its prior guidance for the 737 Max this year, saying it sees 400-450 deliveries this year with production of the 737 rising to 38 planes per month. The company plans to reach production of 50 planes per month by 2026.
This guidance comes after the plane maker suffered a setback with its 737 Max production in mid-April, warning that a problem with several brackets in the fuselage would affect deliveries.
As for the 787 Dreamliner, Boeing said it increased production to four per month with plans to ramp to five per month by the end of the year. The company has a long-term goal of making 10 Dreamliners per month by 2026. Boeing plans to produce 70-80 787 jets this year.
Earlier this month Boeing announced it delivered a total of 136 planes in Q2, including 103 of its 737 Max narrowbody jets. For the first half of the year, Boeing commercial deliveries totaled 266 jets, a 23% jump from a year ago. Boeing also delivered 20 787 Dreamliners in the quarter, bumping its total to 31 for the year.
In terms of new orders, Boeing won orders for 288 new planes last month, mostly due to a huge order from Air India for 190 MAX jets, 20 Dreamliners, and 10 777X planes. Boeing also confirmed a previously announced order for 39 Dreamliners from Riyadh Air, a new Saudi Arabian airline.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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