Boeing has posted a $3.3 billion loss in the third quarter of 2022, attributed to increased costs on several defense programs due in part to supply chain expenses.
The company flagged a number of fixed-price defense contracts that have been hit with surging costs, including the KC-46, an aerial refueling and strategic military transport aircraft, and the US presidential plane, Air Force One.
The losses in these projects were “driven by higher estimated manufacturing and supply chain costs, as well as technical challenges,” Chief Executive Dave Calhoun said in a letter to employees.
Nevertheless, Boeing reported a 4% percent rise in revenues to $16 billion.
Operating cash flow improved to $3.2 billion in the quarter, reflecting higher commercial deliveries, favorable receipt timing, and a tax refund.
Cash and investments in marketable securities increased to $14.3 billion, compared to $11.4 billion at the beginning of the quarter, primarily driven by cash from operations. The company has access to credit facilities of $12.0 billion, which remain undrawn.
Commercial Airplanes third-quarter revenue increased to $6.3 billion, driven by the resumption of 787 deliveries and higher 737 deliveries. Operating margin of 10.3% also reflects lower abnormal costs as compared to the third quarter of 2021, partially offset by higher period expenses, including R&D expense.
Boeing also resumed 787 deliveries in late August, following comprehensive reviews to ensure each airplane meets the company’s highest standards. The program is producing at a low rate with an expected gradual return to five per month over time.
Since late 2020, the 737 MAX fleet has completed nearly 1 million revenue flights. During the quarter, the company secured net orders for 227 aircraft, including 167 737 airplanes, 27 767 airplanes, 18 777 airplanes, and 15 787 airplanes.
Commercial Airplanes delivered 112 airplanes during the quarter and backlog included over 4,300 airplanes valued at $307 billion.
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