Boeing Earnings: Smaller Losses Seen, Cash Flow In Spotlight After Sweeping Deal

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Boeing (BA) prepares to report earnings for the third quarter early Wednesday, while a sweeping new financial deal with jet supplier Spirit AeroSystems (SPR) is seen weighing on its cash flow. Boeing stock rose slightly Tuesday, near a 2023 low.

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Boeing Earnings Woes

Estimates: Analysts expect Boeing to sharply pare its net loss per share to $3.18 from $6.18 a year ago, according to FactSet. That would mark the ninth consecutive quarterly loss. The last quarter Boeing posted actual earnings was in Q2 2021, and it’s expected to do so again in the current fourth quarter.

Revenue is seen growing almost 13%, year over year, to $18.013 billion. That would be the third straight quarter of slowing revenue gains.

Boeing has already reported Q3 deliveries of 105 commercial planes and 28 defense jets. It also reported orders for 224 planes during September, up from 45 orders in August, reflecting the ongoing recovery in commercial air travel.

Results: Check back Wednesday before the open.

Outlook: For the full year, Wall Street expects $4.67 billion in cash flow from operations, near the low end of Boeing’s guidance for $4.5 billion-$6.5 billion. Analysts see $3.35 billion in free cash flow vs. the company guidance for $3 billion-$5 billion.

Boeing Stock

Shares of Boeing gained 0.7% to 182.36 in Tuesday’s stock market action. Boeing stock hit a 2023 low in intraday action Monday, before closing fractionally higher. It remains well below the 10-week and 40-week moving averages, the MarketSmith chart shows. BA stock offers no buy point after its last breakout in July failed.

Boeing’s Millions To Support Spirit

This year, quality defects at fuselage supplier Spirit AeroSystems have curbed Boeing’s 737 and 787 programs, which already suffered during the pandemic. Those issues include misdrilled holes in the aft fuselage bulkhead of the 737, Boeing’s bestselling jet.

But on Monday, Bernstein analysts cut their price target on Boeing to $270 from $274, while upgrading Spirit stock to outperform.

The firm now expects 396 deliveries of the 737 in 2023, the Fly reported. That is below the low end of company guidance for 400-450 deliveries. Bernstein analysts also noted news last week of a financial agreement between Boeing and Spirit AeroSystems.

Boeing will now pump $100 million immediately into its troubled supplier, aiming to stabilize jet production. But analysts at Vertical Research expect the money to come out of Boeing’s cash flow, the most closely watched metric on Wall Street.

Despite rising orders, Boeing stock has slumped 25% below the 52-week high, set in July, while losing key levels of support.

Spirit AeroSystems fired chief executive Tom Gentile this month, replacing him with former Boeing executive Pat Shanahan. It is due to report earnings Nov. 1, before the market opens.

SPR stock gained 1% to 22.15 on Tuesday. Shares hit a three-year low of 14.65 last month.

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