Boeing Co (NYSE:BA)
When compared to the same period of the previous year, Boeing (NYSE:BA) delivered a greater number of airplanes during the first two months of 2023. That is exactly how things ought to be done.
Investors are more concerned with the commercial aerospace giant’s ability to generate positive earnings than they are with increasing shipments.
In most cases, monthly orders and deliveries are reported on Boeing’s (NYSE:BA) commercial website around the middle of each month. In the month of February, Boeing delivered a total of 28 jets, 25 of which were 737 MAX jets. In February of 2022, Boeing delivered a total of 22 aircraft, including 20 737 MAX aircraft.
Boeing has experienced some challenging times during the past few years. The corporation has been dealing with multiple crises, such as the global COVID-19 outbreak, a fall in global aviation traffic, and the grounding of the 737 MAX aircraft after two catastrophic crashes involving the aircraft. The company’s financial performance has suffered as a result of these issues; Boeing forecasts that it will incur losses of more than $12 billion in 2020.
On the other hand, there is some encouraging news in the near future. The month of February 2023 witnessed an increase in the number of deliveries made by Boeing, which is an indication that the corporation is making progress. Yet, as numerous professionals in the field have mentioned, it is essential that revenues come after.
February deliveries were lower than the 38 that were delivered in January; however, Boeing still delivered 66 planes in the first two months of the year, which is more than the 54 that were delivered in the first two months of 2022.
The financial market anticipates that Boeing will supply approximately 120 planes in the first three months of 2023, which is an increase from the 95 jets that were delivered in 2022. This leaves approximately fifty-five jets to deliver in the month of March. It really ought to be doable. Prior to the pandemic, Boeing was delivering approximately sixty jets every single month.
This rise in shipments is an encouraging sign for Boeing as it implies that the company is beginning to recover from the difficulties that it has had over the past several years. Nonetheless, it is essential to keep in mind that Boeing still has a significant distance to travel before it can reclaim its status as the world’s preeminent builder of airplanes.
It is crucial to satisfy delivery expectations in order to meet profitability estimates, which is something that Boeing has had difficulties achieving since the MAX was grounded in March 2019 and the Covid-19 epidemic began. In 12 of the past 15 quarters, the company’s actual results were lower than the predictions made by Wall Street.
Wall Street anticipates a loss of 69 cents per share for the first quarter of 2023, which is an improvement compared to the loss of $2.75 per share that was reported for the first quarter of 2022. For six quarters in a row, Boeing has been unable to turn a profit and has declared a loss.
The Significance of Profits
It is anticipated that Boeing will record a profit for the three months ending in September 2023, as well as a modest profit for the whole year. The free cash flow is projected to be $4 billion in 2023, which is an increase from $2.3 billion in 2022.
Regarding orders for new jets in 2023, Boeing has already received sixty of them in the first two months of the year. During the first two months of 2022, orders for 114 airplanes were placed with Boeing. Data for March 2023 is not yet available; nevertheless, Boeing has recently secured 78 confirmed orders for 787 planes from two Saudi carriers.
Although it is encouraging that Boeing has been able to increase the number of deliveries, it is essential that the company also improve its financial performance. The business has been operating at a loss for several years, and this cannot continue into the foreseeable future.
The 737 MAX problem, the pandemic, and greater rivalry from other aircraft manufacturers are all contributing causes to Boeing’s current financial predicament, which is a result of a combination of these and other factors. But, in order to reverse its financial fortunes, Boeing must move in a decisive manner.
Cost-cutting is one of the most important areas that Boeing needs to concentrate on. The corporation has already made some progress toward its goal of streamlining its processes and decreasing the size of its personnel, but there is still more work to be done. In addition, in order for Boeing to maintain its market leadership position, the company must continue to make investments in cutting-edge technology and product developments.
In premarket trading, Boeing shares has experienced a decrease of 2.3%. The most likely cause is not related to orders or deliveries. The market is in a downward trend. Futures contracts for the S&P 500 (SPX -0.70%) and the Dow Jones Industrial Average (DJIA -0.87%) are both down approximately 1.7%.
As trading for Wednesday began, Boeing company shares had gained almost 9% so far this year and approximately 15% over the course of the previous year.
An optimistic sign is a fact that Boeing increased the number of deliveries it made in February 2023; nevertheless, the business needs to follow this up with stronger financial performance. Boeing is facing a number of serious obstacles, but it is certain that it can improve its situation by implementing the appropriate approach. Boeing is able to reclaim its position as the industry’s preeminent aircraft manufacturer if it places a priority on cutting costs, making investments in emerging technology, and setting the standard for environmentally responsible aviation.
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