On July 31, 2024, Boeing Co (BA, Financial) released its 8-K filing for the second quarter of 2024. Boeing, a major aerospace and defense firm operating in commercial airplanes, defense, space, and security, and global services, reported a challenging quarter with significant financial setbacks.
Performance Overview
Boeing Co (BA, Financial) reported second-quarter revenue of $16.9 billion, falling short of the analyst estimate of $17.23 billion. The company posted a GAAP loss per share of ($2.33) and a core (non-GAAP) loss per share of ($2.90), significantly missing the estimated loss per share of ($1.12). The results were primarily impacted by lower commercial delivery volumes and losses on fixed-price defense development programs.
Financial Achievements and Challenges
Despite the setbacks, Boeing Co (BA, Financial) made substantial progress in strengthening its quality management system and positioning the company for future stability. The company submitted a comprehensive safety and quality plan to the Federal Aviation Administration (FAA) and announced an agreement to acquire Spirit AeroSystems, expected to close by mid-2025.
However, the company faced significant challenges, including a net loss of $1.44 billion for the quarter and an operating cash flow of ($3.9) billion. The total company backlog stood at $516 billion, including over 5,400 commercial airplanes.
Segment Performance
| Segment | Revenue (Q2 2024) | Change (YoY) | Operating Margin |
|---|---|---|---|
| Commercial Airplanes | $6.0 billion | -32% | (11.9)% |
| Defense, Space & Security | $6.0 billion | -2% | (15.2)% |
| Global Services | $4.9 billion | 3% | 17.8% |
Income Statement Highlights
Boeing Co (BA, Financial) reported a 15% year-over-year decline in revenue for the second quarter, amounting to $16.87 billion. The GAAP loss from operations was $1.09 billion, with an operating margin of (6.5)%. The net loss for the quarter was $1.44 billion, translating to a loss per share of ($2.33).
Balance Sheet and Cash Flow
Cash and investments in marketable securities totaled $12.6 billion, up from $7.5 billion at the beginning of the quarter, driven by the issuance of $10.0 billion in new debt. Consolidated debt increased to $57.9 billion from $47.9 billion. Operating cash flow was ($3.9) billion, reflecting lower commercial deliveries and unfavorable working capital timing.
Commentary
"Despite a challenging quarter, we are making substantial progress strengthening our quality management system and positioning our company for the future," said Dave Calhoun, Boeing president and chief executive officer. "We are executing on our comprehensive safety and quality plan and have reached an agreement to acquire Spirit AeroSystems. While we have more work ahead, the steps we’re taking will help stabilize our operations and ensure Boeing is the company the world needs it to be."
Analysis
Boeing Co (BA, Financial)'s performance in Q2 2024 highlights the ongoing challenges in the aerospace and defense industry, particularly in commercial airplane deliveries and fixed-price defense programs. The company's strategic initiatives, including the acquisition of Spirit AeroSystems and the submission of a safety and quality plan to the FAA, are critical steps towards long-term stability and growth. However, the significant losses and increased debt levels underscore the need for continued focus on operational efficiency and cost management.
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Explore the complete 8-K earnings release (here) from Boeing Co for further details.
