Boeing reports a GAAP net loss of $425 million in the first quarter

First Quarter 2023

  • Still expect to deliver 400-450 737 airplanes in 2023; plan to increase production to 38 per month later this year
  • Revenue increased to $17.9 billion primarily reflecting 130 commercial deliveries
  • Operating cash flow of ($0.3) billion and free cash flow of ($0.8) billion (non-GAAP); cash and marketable securities of $14.8 billion
  • Total company backlog of $411 billion, including over 4,500 commercial airplanes
  • Reaffirm guidance: $4.5-$6.5 billion of operating cash flow and $3.0-$5.0 billion of free cash flow (non-GAAP)
Table 1. Summary Financial ResultsFirst Quarter
(Dollars in Millions, except per share data)20232022Change
Revenues$17,921$13,99128 %
GAAP
Loss From Operations($149)($1,162)NM
Operating Margin(0.8)%(8.3)%NM
Net Loss($425)($1,242)NM
Loss Per Share($0.69)($2.06)NM
Operating Cash Flow($318)($3,216)NM
Non-GAAP*
Core Operating Loss($440)($1,445)NM
Core Operating Margin(2.5)%(10.3)%NM
Core Loss Per Share($1.27)($2.75)NM
*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 5, “Non-GAAP Measures Disclosures.” 

The Boeing Company [NYSE: BA] recorded first-quarter revenue of $17.9 billion, GAAP loss per share of ($0.69), and core loss per share (non-GAAP)* of ($1.27)(Table 1). Boeing reported operating cash flow of ($0.3) billion and free cash flow of ($0.8) billion (non-GAAP). Results improved on commercial volume and performance.

“We delivered a solid first quarter and are focused on driving stability for our customers,” said Dave Calhoun, Boeing president and chief executive officer. “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 programs and innovate strategic capabilities for our customers and for our future.”

Table 2. Cash FlowFirst Quarter
(Millions)20232022
Operating Cash Flow($318)($3,216)
Less Additions to Property, Plant & Equipment($468)($349)
Free Cash Flow*($786)($3,565)
*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 5, “Non-GAAP Measures Disclosures.” 

Operating cash flow was ($0.3) billion in the quarter reflecting higher commercial deliveries and favorable receipt timing (Table 2).

Table 3. Cash, Marketable Securities and Debt BalancesQuarter-End
(Billions)Q1 23Q4 22
Cash$10.8$14.6
Marketable Securities1$4.0$2.6
Total$14.8$17.2
Consolidated Debt$55.4$57.0
1 Marketable securities consist primarily of time deposits due within one year classified as “short-term investments.”

Cash and investments in marketable securities totaled $14.8 billion, compared to $17.2 billion at the beginning of the quarter (Table 3). Debt was $55.4 billion, down from $57.0 billion at the beginning of the quarter due to the pay down of debt maturities. The company has access to credit facilities of $12.0 billion, which remain undrawn.

Total company backlog at quarter-end was $411 billion.

Segment Results

Commercial Airplanes

Table 4. Commercial AirplanesFirst Quarter
(Dollars in Millions)20232022Change
Commercial Airplanes Deliveries1309537 %
Revenues$6,704$4,19460 %
Loss from Operations($615)($897)NM
Operating Margin(9.2)%(21.4)%NM

Commercial Airplanes first-quarter revenue increased to $6.7 billion driven by higher 737 and 787 deliveries, partially offset by 787 customer considerations (Table 4). Operating margin of (9.2) percent also reflects abnormal costs and period expenses, including research and development.

On the 737 program, earlier this month the program’s fuselage supplier notified Boeing that a non-standard manufacturing process was used on two fittings in the aft fuselage section of certain 737 airplanes. This is not an immediate safety of flight issue and the in-service fleet can continue operating safely. While near-term deliveries and production will be impacted as the program performs necessary inspections and rework, the program still expects to deliver 400-450 airplanes this year. On production, the supplier master schedule remains unchanged including anticipated production rate increases, which will result in higher inventory levels. The company expects final assembly production to recover in the coming months with plans to increase to 38 per month later this year and 50 per month in the 2025/2026 timeframe.

The 787 program is producing at three per month with plans to ramp production to five per month in late 2023 and to 10 per month in the 2025/2026 timeframe.

During the quarter, Commercial Airplanes secured net orders of 107. Also during the quarter the company secured commitments from Air India for 190 737 MAX, 20 787, and 10 777X airplanes and from Riyadh Air and Saudi Arabian Airlines for up to 121 787 airplanes. Commercial Airplanes delivered 130 airplanes during the quarter and backlog included over 4,500 airplanes valued at $334 billion.

Defense, Space & Security

Table 5. Defense, Space & SecurityFirst Quarter
(Dollars in Millions)20232022Change
Revenues$6,539$5,48319 %
Loss from Operations($212)($929)NM
Operating Margin(3.2)%(16.9)%NM

Defense, Space & Security first-quarter revenue was $6.5 billion. First-quarter operating margin of (3.2) percent primarily reflects a $245 million pre-tax charge on the KC-46A Tanker program largely driven by the previously shared supplier quality issue resulting in factory disruption and rework. Results also include the continued operational impact of labor instability and supply chain disruption on other programs.

During the quarter, Defense, Space & Security captured awards from the U.S. Army for 184 Apaches and from the U.S. Air Force for 15 KC-46A Tankers and the initial E-7 development contract. Backlog at Defense, Space & Security was $58 billion, of which 30 percent represents orders from customers outside the U.S.

Global Services

Table 6. Global ServicesFirst Quarter
(Dollars in Millions)20232022Change
Revenues$4,720$4,3149 %
Earnings from Operations$847$63234 %
Operating Margin17.9%14.6%3.3 pts

Global Services first-quarter revenue of $4.7 billion and operating margin of 17.9 percent reflect higher commercial volume and favorable mix.

During the quarter, Global Services committed to set up the first Boeing Converted Freighter line in India in collaboration with GMR Aero Technic, delivered AerCap’s 50th 737-800 Boeing Converted Freighter and broke ground on a new component operations facility in Jacksonville, Florida.

Additional Financial Information

Table 7. Additional Financial InformationFirst Quarter
(Dollars in Millions)20232022
Revenues
Unallocated items, eliminations and other($42)$—
Earnings/(loss) from Operations
FAS/CAS service cost adjustment$291$283
Other unallocated items and eliminations($460)($251)
Other income, net$302$181
Interest and debt expense($649)($637)
Effective tax rate14.3%23.2%

The increase in loss from Other unallocated items and eliminations was driven by timing of allocations and deferred compensation expense. Other income primarily reflects an increase in investment income due to higher interest rates. The first-quarter effective tax rate primarily reflects the tax benefit of pretax losses.

Segment results reflect the realignment of Boeing Capital into the Commercial Airplanes segment during the first quarter of 2023. Prior period amounts have also been reclassified to conform to the 2023 presentation.