By Senad Karaahmetovic
Boeing (NYSE:BA) reported much weaker than expected top and bottom line results to send its shares modestly lower on Wednesday.
BA posted a loss per share of $6.18 to miss the analyst estimate of $0.18. Revenue for the quarter came in at $16 billion versus the consensus estimate of $18.19 billion. Boeing said results were impacted by a $2.8 billion forward charge in Defense, Space & Security.
"Revenue and earnings were significantly impacted by losses on our fixed-price defense development programs."
On a more positive note, the adjusted free cash flow came in at $2.91 billion, significantly higher than the consensus of $1.02 billion. The company continues to expect positive free cash flow for 2022.
Citi analysts believe the key focus on the earnings call will be on "profit (poor, even excluding the charges) or cash (very strong)."
"We are not sure, but feel the cash flow beat may be more important, given the $46bn of net debt at H1 falling to a current $43bn. We expect this continue to fall as aircraft are delivered out of inventory," they wrote in a client note.
RBC analysts added:
"We do not believe investors will be caught by surprise by a defense charge, but the magnitude of the charge is greater than expected. Ideally this finally represents the complete de-risking of many of the defense development programs."
Boeing shares are almost flat at the New York open.