Boeing trims losses to $425m in the first quarter as deliveries boost revenue

Boeing reduced its loss to $425 million in the first quarter of 2023 as revenue rose after the US plane maker increased aircraft deliveries.

The company, which posted a $1.2 billion loss in the same period last year, has reported losses for seven consecutive quarters as it struggles with the quality-control issues that have affected production rates.

Revenue rose 28 per cent year on year to $17.9 billion in the first three months of the year, a reflection, primarily, of increased delivery of commercial planes, Boeing said in its earnings statement on Wednesday. This exceeded analyst expectations, but was still below the pre-pandemic level of the first quarter in 2019.

"We delivered a solid first quarter and are focused on driving stability for our customers," said Dave Calhoun, Boeing president and chief executive.

"We are progressing through recent supply chain disruptions but remain confident in the goals we set for this year, as well as for the longer term. Demand is strong across our key markets and we are growing investments to advance our development programmes and innovate strategic capabilities for our customers and for our future."

Investors are closely watching the profits of the company as it tries to recover from a series of crises since two fatal 737 Max crashes in 2018 and 2019. Its latest challenge was a manufacturing issue on some of its 737 Max jets that threatened to derail deliveries.

Boeing said its total backlog reached $411 billion, including more than 4,500 commercial planes valued at $334 billion.

Its operating cash flow for the quarter reached $318 million, compared to $3.2 billion in the previous-year period, after improved "commercial volume and performance", Boeing said.

The company anticipates $4.5 billion to $6.5 billion in operating cash flow this year.

Meanwhile, free cash flow for the quarter was $786 million, narrowed from $3.56 billion in the same quarter of 2022, after higher commercial jet deliveries.

Boeing also reiterated its guidance for free cash flow of $3 billion to $5 billion for the year.

Its commercial planes unit recorded a 60 per cent increase in first-quarter revenue to $6.7 billion driven by higher 737 and 787 deliveries, it said.

The plane maker handed over 130 commercial jets in the first three months of the year, compared to 95 jets in the prior-year period.

Boeing said it expected to deliver 400-450 of its 737 planes this year, though "near-term deliveries and production will be impacted as the programme performs necessary inspections and rework".

The delivery expectation reaffirms its earlier guidance, reassuring investors after the latest production issues on the Max model.

"On production, the supplier master schedule remains unchanged including anticipated production rate increases, which will result in higher inventory levels," it said.

The company expects final assembly production to recover in the coming months with plans to increase manufacturing to 38 of its 737 Max per month later this year and 50 per month in the 2025-2026 timeframe.

Boeing this month said it was temporarily halting deliveries of some of its 737 Max models as it deals with a production issue on the rear end of some aircraft that stemmed from one of its suppliers.

Spirit Aerosystems, the sole supplier of the fuselage for Boeing's 737 narrow-body passenger planes, notified the company that two fittings in the fuselage that interact with the tail fin were installed with a non-standard manufacturing process on the 737-7, 737-8, 737-8-200 and P-8 models.

For the 787 wide-body programme, Boeing is producing three jets a month with plans to step up production to five a month later this year and to 10 a month in 2025-2026, it said.

Boeing's Defence, Space & Security unit recorded a 19 per cent increase in first-quarter revenue to $6.5 billion. Its global services unit registered revenue of $4.7 billion, up 9 per cent year on year.