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Airplanes and helicopters. Boeing reports 3Q results

The highlights

Boeing reported third-quarter results.

The highlights:

Continued progress on global safe return to service of 737 MAX aircraft and focus on operational stability

Revenue of $15.3 billion, GAAP loss per share of ($0.19) and core (non-GAAP) loss per share of ($0.60)

Operating cash flow of ($0.3) billion; cash and marketable securities of $20.0 billion

Commercial Airplanes backlog of $290 billion and added 93 net orders.

The Boeing Company reported third-quarter revenue of $15.3 billion, driven by higher commercial airplanes and services volume. GAAP loss per share of ($0.19) and core loss per share (non-GAAP) of ($0.60) primarily reflects higher commercial volume. The industry recorded operating cash flow of ($0.3) billion.

Operating cash flow improved to ($0.3) billion in the quarter, reflecting higher commercial deliveries, higher order receipts, and lower expenditures. Operating cash flow was also favorably impacted by a $1.3 billion income tax refund in the quarter.

Cash and investments in marketable securities decreased to $20.0 billion, compared to $21.3 billion at the beginning of the quarter, primarily driven by debt repayment and operating cash outflows. Debt was $62.4 billion, down from $63.6 billion at the beginning of the quarter due to the repayment of maturing debt.

Total company backlog at quarter-end was $367 billion.

Segment Results

Commercial Airplanes

Commercial Airplanes third-quarter revenue increased to $4.5 billion primarily driven by higher 737 deliveries, partially offset by lower 787 deliveries. Third-quarter operating margin improved to (15.5) percent primarily due to higher deliveries.

The US giant is continuing to make progress on the global safe return to service of the 737 MAX. Since the FAA's approval to return the MAX to operations in November 2020, Boeing has delivered more than 195 B-737 MAX aircraft and airlines have returned more than 200 previously grounded airplanes to service. 31 airlines are now operating the 737 MAX, safely flying over 206,000 revenue flights totaling more than 500,000 flight hours (as of October 24, 2021). The 737 program is currently producing at a rate of 19 per month and continues to progress towards a production rate of 31 per month in early 2022, and the company is evaluating the timing of further rate increases.

The company continues to focus 787 production resources on conducting inspections and rework and continues to engage in detailed discussions with the FAA (Federal Aviation Administration) regarding required actions for resuming delivery. The current 787 production rate is approximately two airplanes per month. The company expects to continue at this rate until deliveries resume and then return to five per month over time. The low production rates and rework are expected to result in approximately $1 billion of abnormal costs, of which $183 million was recorded in the quarter.

Commercial Airplanes secured orders for 70 MAX, 24 freighters, and 12 B-787 airplanes. Commercial Airplanes delivered 85 airplanes during the quarter and backlog included over 4,100 airplanes valued at $290 billion.

Defense, Space & Security

Defense, Space & Security third-quarter revenue decreased to $6.6 billion and third-quarter operating margin decreased to 6.6 percent, primarily due to a $185 million earnings charge on the Commercial Crew program driven by the second uncrewed Orbital Flight Test now anticipated in 2022 and the latest assessment of remaining work.

During the quarter, Defense, Space & Security secured awards for five P-8A Poseidon aircraft for the German Navy and four CH-47F Block II Chinook helicopters for the US Army, as well as a Joint Direct Attack Munition contract for the US Air Force. Defense, Space & Security also conducted the MQ-25 unmanned aerial refueling of a US Navy E-2D and F-35C, and delivered a total of 37 aircraft during the quarter, including the first CH-47F Chinook to the Royal Australian Army.

Backlog at Defense, Space & Security was $58 billion, of which 33 percent represents orders from customers outside the US.

Global Services

Global Services third-quarter revenue increased to $4.2 billion and third-quarter operating margin increased to 15.3 percent primarily driven by higher commercial services volume. Operating margin was also favorably impacted by lower severance costs and mix of products and services.

During the quarter, Global Services captured orders for 12 additional 737/800 converted freighters for BBAM, an award for performance-based logistics support of the global C-17 fleet, and a modification award for Chinook infra-red suppression systems for the UK Armed Forces. Global Services also announced a partnership to expand capacity for 767/300 Boeing Converted Freighters and was selected to provide training to the United Aviate Academy.

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AVIONEWS - World Aeronautical Press Agency