Boeing stock (NYSE:BA) fell short of analyst estimates in the third quarter owing to a series of one-time expenses and sluggish defense sales. However, free cash flow was high, and commercial aviation looks to be on the mend.
Investors were unsure what to make of the outcome. Boeing stock (NYSE:BA) rose 2.4% before plummeting as much as 4% on a volatile trading day.
So, what’s the deal with Boeing Stock?
Boeing stock (NYSE:BA) investors have had a terrible few years, with the stock (NYSE:BA) being impacted first by troubles with the company’s 737 MAX and then by the pandemic and its effect on Boeing’s airline clients. The 737 MAX has resumed flight, and airlines are gradually reconstructing their schedules, but Boeing has a long road to recovery.
Boeing’s most recent quarter highlighted both the challenges and the opportunities. The firm lost $6.18 per share on $16 billion in sales, falling short of analyst forecasts of a $0.02 per share profit on $17.86 billion in revenue. The difference was driven by over $3 billion in one-time costs, largely from fixed-price military projects.
Boeing’s military sector saw sales plummet 20% to $5.3 billion, with an operating loss of $2.8 billion owing to charges and supply chain expenses. Commercial reported a 32% increase in deliveries and a 40% increase in revenue yearly but a negative 10.3% operating profit.
At $3.2 billion, free cash flow is comfortably above analyst estimates and reversed a free cash flow outflow in the same three months of 2021. Boeing also reaffirmed its full-year free cash flow forecast and said that it expects commercial delivery patterns to improve from here.
So, what now?
This was a glass-half-full/glass-half-empty quarter, and the tumultuous trading in Boeing’s stock (NYSE:BA) that followed reflected the company’s current uncertainties. The firm looks to be on the mend, but it will most likely be a sluggish ascent from here, and with the economic situation unclear, it may encounter more obstacles.
Boeing received a post-earnings lift when Alaska Air Group exercised an option on 52 extra 737 MAX aircraft. Still, executives on the call with investors predicted supply chain issues will persist through 2023. Boeing currently has a backlog of over 4,300 commercial aircraft.
So, although the downside seems to be limited from here, there isn’t much of a trigger to get investors excited about purchasing Boeing stock (NYSE:BA) right now. Trading on Wednesday seemed to reflect this.
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