Boeing posted another quarterly loss due to a persistent supply chain crisis and staffing issues, but the company reaffirmed its 2023 outlook on Wednesday amid strong aviation demand.
Boeing posted another quarterly loss due to a persistent supply chain crisis and staffing issues, but the company reaffirmed its 2023 outlook on Wednesday amid strong aviation demand.
Boeing said its commercial aircraft business was hit by "unusual costs", while labor instability and supply chain disruptions impacted its defence, space and security unit.
The company's loss of $634 million for the quarter ended December 31 was lower than the loss of $4.1 billion in the same period last year. Revenue rose 35 percent to $20 billion, but fell short of analyst forecasts.
The aviation giant, which has been beset in recent years by production problems and certification delays following the 737 Max crash, nevertheless ended 2022 with positive free cash flow for the first time since 2018 as it reaffirmed 2023 targets.
"We had a solid fourth quarter and 2022 proves to be an important year in our recovery," said Dave Calhoun, Boeing's chief executive officer.
He told analysts the company expects more announcements similar to the large orders it unveiled in 2022 with United Airlines and Delta Air Lines.
"There are some big interests in aviation," Calhoun said. "I would say the majority is now outside the US as inside the US and we are looking at really big things."
He added that even nervousness about the near-term economic outlook did not affect those plans.
"The recession doesn't seem to be in the way because remember, we're competing for deliveries four and five years from now, so they're not really counting on a recession," he said.
- 'Bumpy' 2023 -
Boeing has said it expects to return to a level of financial strength comparable to its pre-pandemic position around the 2025-26 time frame.
Strong demand for commercial planes has helped the company's turnaround as airlines struggle to keep up with flying demand and replace older planes with newer jets that consume less energy and emit fewer carbon emissions.
But efforts to ramp up production have been hampered by disruptions in sourcing key parts and materials, including delays in receiving engines from key suppliers.
In an interview with CNBC, Calhoun said that suppliers have made progress in hiring more employees, but are still working through the process to be able to ramp up production.
"You have to train," Calhoun told the network. "Each one of these products is very sophisticated."
He predicted that 2023 would remain "rough" as far as the supply chain is concerned, but said the ramp-up was aided by the shared knowledge that aviation demand remains strong.
Boeing has resumed deliveries of the 787 Dreamliner after a prolonged pause and confirmed it will increase production from current "low" levels in 2023.
The company is expected to deliver 70-80 Dreamliners in 2023, up from 31 last year. Boeing is also eyeing 400-450 deliveries of the 737, compared to the 387, in 2022.
- Success in China? ,
A key unknown facing the company is how much bankable revenue it can expect from China after a lengthy pause in deliveries of 737 Max planes while the country maintains strict COVID-19 policies.
Boeing executives previously suggested that the suspension was at least a reflection of the strained state of US-China relations.
China was the last major market to approve the Max to return to service after a global grounding following two fatal crashes.
Earlier this month, a 737 MAX operated by China Southern Airlines made the first flight by a MAX aircraft in the country since March 2019.
Calhoun told CNBC that he expects to get the 100 Max planes already in China back in the air in the next six months, but he's "presuming to speculate" on when deliveries of the new planes can resume. will not participate in the game.
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