Key Moments
- Boeing reported a net profit of $8.22 billion, or $10.23 per share, in Q4. A year earlier, it lost $3.86 billion.
- The sale of Jeppesen for $10.6 billion helped offset losses. Rising 737 MAX and 787 output also supported results.
- Boeing took a $565 million charge on the KC-46 tanker program. Its commercial and defense units remained loss-making for the quarter.
Quarter Marked by Profit Swing and Major Asset Sale
SEATTLE, Jan 27 (Reuters) – Boeing returned to profit in Q4. The main drivers were the sale of its digital aviation services arm and higher aircraft production.
However, the company still recorded a $565 million charge tied to its KC-46 tanker program. Boeing said costs were rising due to supply chain and production support needs.
The Jeppesen sale helped offset losses in Boeing’s commercial and defense units. At the same time, Boeing boosted production of the 737 MAX and 787. It also generated positive free cash flow, a key metric for investors.
Production Trends and Earnings Performance
Boeing ended the year producing 42 737 MAX jets per month. The company plans to raise output to 47 per month this year. Meanwhile, it is also working to increase 787 production to eight aircraft per month.
For the quarter ended in December, Boeing posted net income of $8.22 billion, or $10.23 per share. This compared with a net loss of $3.86 billion, or $5.46 per share, a year earlier.
On an adjusted basis, which includes the Jeppesen sale, Boeing recorded earnings of $0.32 per share. Analysts had expected a loss of $0.39 per share and had not included the Jeppesen transaction.
| Metric (Quarter through December) | Current Period | Year-Ago Period |
|---|---|---|
| Net income (loss) | $8.22 billion | $(3.86) billion |
| EPS (reported) | $10.23 | $(5.46) |
| Adjusted EPS (including Jeppesen sale) | $0.32 | Not stated |
| 737 MAX monthly output at year-end | 42 aircraft | Not stated |
| Planned 737 MAX monthly output this year | 47 aircraft | Not stated |
| Fourth-quarter revenue | $23.95 billion | Not stated |
Segment Results and KC-46 Impact
Despite production gains, Boeing’s commercial airplanes segment lost $632 million in Q4. The defense and space division also reported a loss, of $507 million.
In a CNBC interview, CEO Kelly Ortberg said the KC-46 charge should be a one-time event.
Boeing shares traded about 1.3% lower in early trading after the earnings release.
Jeppesen Sale, Spirit Reacquisition, and Services Performance
The quarter included the Jeppesen sale to Thoma Bravo and the Spirit AeroSystems reacquisition for $4.7 billion in stock. Boeing also paid down more than $3 billion of Spirit debt. The net impact was about a $7.6 billion gain.
Excluding the Jeppesen deal, Boeing’s services unit generated nearly $1 billion in profit, according to Jefferies.
Deliveries Reach Highest Level Since 2018
Boeing delivered 600 jetliners last year. That was its highest annual total since 2018.
The company has faced major challenges, including the 737 MAX crisis, the pandemic, supply chain constraints, a safety incident, and labor issues.
CEO Ortberg said the company must complete certification of the 737-7, 737-10 and 777X. He also said Boeing must fix delayed defense programs that have already cost billions.
Cash Flow and Revenue Dynamics
Boeing generated $375 million in cash during Q4, but it burned $1.9 billion for the full year. The company said delays in 737 MAX and 777X certification contributed to the annual cash outflow.
Fourth-quarter revenue rose 57% to $23.95 billion. Analysts had expected about $22.6 billion, according to LSEG.
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