The Boeing Company Q2 2024 Earnings Summary $BA

In the latest earnings call, Boeing Company revealed a Q2 2024 revenue of $16.9 billion, driven largely by reduced commercial delivery volumes, resulting in a loss per share of $2.90. CEO Dave Calhoun underscored a strategic pivot toward enhancing safety and quality after recent setbacks, with free cash flow usage at $4.3 billion aligning with expectations. Despite the challenges, the backlog swelled to $437 billion, buoyed by strong demand seen at the Farnborough Airshow. Key airplane programs, like the 737, are set for production increases, while the anticipated acquisition of Spirit AeroSystems is positioned as a pivotal step toward unifying Boeing's quality management efforts. Although the defense sector faced hurdles due to fixed-price contract losses, a cautiously optimistic outlook on long-term demand reflects Boeing's resilience. Join us to dive deeper into these insights and forecasts that could impact your investment strategy.

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The Boeing Company reported Q2 2024 results, reflecting ongoing challenges and strategic shifts as it seeks to stabilize operations and improve quality. Revenue for the quarter was $16.9 billion, which the CEO, Dave Calhoun, attributed primarily to lower commercial delivery volumes. “The quarter loss per share was $2.90,” he noted, highlighting $1 billion in losses from fixed-price defense development programs.

Calhoun emphasized the company's commitment to recovery, stating, “We’ve been on a multiyear path to strengthen our safety and quality management systems.” He elaborated on measures taken post-January's Alaska accident, including adjusting production rates to allow supply chains to catch up, which has led to improved performance in key metrics across most airplane programs.

Brian West, the CFO, provided context on the financials, stating free cash flow usage was $4.3 billion for the quarter, in line with expectations due to lower commercial deliveries and unfavorable working capital timing. “We expect these working capital pressures to unwind as production stabilizes,” West added, signaling confidence in future cash flow improvements.

On specific airplane programs, Boeing Commercial Airplanes delivered 92 aircraft, with a revenue of $6 billion. The backlog expanded to $437 billion, showcasing strong demand as orders at the recent Farnborough Airshow exceeded 150 airplanes, including nearly 100 widebodies. The 737 program’s production is expected to ramp up to 38 units per month by year-end, and progress on the 777-9 includes successful FAA flight testing after obtaining type inspection authorization.

Calhoun also discussed the acquisition of Spirit AeroSystems, anticipated to close by mid-2025. He described this move as crucial for unifying Boeing’s safety and quality management systems, stating, “This planned acquisition is a significant demonstration of our resolve to invest heavily in quality and safety.”

Boeing’s defense sector experienced disappointing results, with losses attributed to fixed-price development contracts on programs such as the KC-46A and T-7A. However, Calhoun remains “cautiously optimistic” about long-term defense prospects as the geopolitical environment continues to spur demand.

In closing, West reassured investors about cash management, emphasizing a focus on maintaining an investment-grade rating. “We remain comfortable with our $10 billion cash balance as we navigate near-term cash flows,” he stated.

Boeing's strong long-term demand and commitment to quality signal a resilient path forward, a perspective that both Calhoun and West articulated throughout the call.