Challenges in Boeing aircraft production weighed on its third-quarter performance

Dan Catchpole

Reuters Seattle, October 27 - Boeing BA.N reported a third-quarter loss of 26 cents per share on Tuesday, with challenges in its commercial aircraft division overshadowing higher margins in other parts of the business.

After years of crises and controversy (link), the aircraft manufacturer continued its long road to recovery this quarter , as those crises and controversies previously damaged its reputation and saddled it with tremendous debt. During this period, the two newest 737 MAX variants — the 737-7 and -10 — received certification from US regulators (link), the company secured a contract for the US Navy's sixth-generation F/A-XX fighter jet (link), and once again achieved quarterly free cash flow.

The aircraft manufacturer reported an adjusted quarterly loss of 34 cents per share. According to data compiled by the London Stock Exchange Group (LSEG), analysts had previously expected a loss of 21 cents per share, on average.

Boeing's commercial aircraft division saw revenue dip slightly to $10.7 billion, with an operating loss of $697 million and an operating margin of -6.5%. In its earnings report, the company attributed its performance to low-margin passenger aircraft deliveries and rising production costs (including supply chain costs).

The company has struggled to raise monthly production of the 737 models from 42 to 47 aircraft, a goal it had hoped to reach in the summer (link). Boeing CEO Kelly Ortberg stated at an industry conference in September that the company cannot manufacture wings quickly enough.

In Boeing's defense division, an increase in deliveries, improved operations, and a $252 million subsidiary sale helped drive quarterly profit close to $500 million, with an operating margin of 6.2%, up from 1.7% in the same period last year.

Boeing Global Services achieved a quarterly profit of $1 billion, with an operating margin of 18.3%.

At the end of the quarter, Boeing's net debt stood at $25.2 billion, down slightly from $25.9 billion last quarter and $30.4 billion a year ago. (link)

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