Boeing beats on everything, boosted by strength in commercial airplanes business

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Boeing Co. assuaged investors’ fears for the moment on Wednesday, as the aerospace and defense giant’s fourth-quarter results beat Wall Street expectations in all of the key metrics, amid strength in the closely watched commercial-airplanes business.

But a sense of uncertainty remained, as the company did not provide forward guidance in the earnings release. The post-earnings conference call with analysts starts at 10:30 a.m. Eastern.

The stock
edged up 0.7% in premarket trading. It closed Tuesday at the lowest price since Nov. 10, as it has tumbled 19.5% since the in-flight blowout of a panel on a Boeing 737 Max 9 plane led to groundings of aircraft.

“While we report our financial results today, our full focus is on taking comprehensive actions to strengthen quality at Boeing, including listening to input from our 737 employees that do this work every day,” said Chief Executive Dave Calhoun.

Net losses narrowed to $2.22 billion, or $3.67 a share, from $4.94 billion, or $8.30 a share, in the same period a year ago. Excluding nonrecurring items, such as pension-related costs, core per-share losses of 47 cents beat the FactSet loss consensus of 78 cents.

Revenue grew 10.2% to $22.02 billion, above the FactSet consensus of $21.14 billion.

Within the Commercial Airplanes business segment, revenue increased 13.1% to $10.48 billion to beat the FactSet consensus of $9.98 billion.

The segment also swung to earnings from operations of $41 million, from a loss of $603 million last year, while operating margins improved to positive 0.4% from negative 6.5%.

The company said Commercial Airplanes was taking “immediate actions” to strengthen quality of the 737 program, including requiring additional inspections within its factory and at its suppliers.

Meanwhile, the company said the 737 program continues to deliver airplanes and the production rate is currently 38 planes a month, which compares with fourth-quarter deliveries of 157.

Elsewhere, Defense, Space & Security revenue was up 9.1% to $6.75 billion, above expectations of $6.16 billion, and Global Services revenue rose 6.2% to $4.85 billion to top forecasts of $4.83 billion.

Free cash flow of $2.95 billion was well above the FactSet consensus of $1.91 billion.

The stock has tumbled 23.1% in January through Tuesday, but has gained 7.3% over the past three months. In comparison, the Dow Jones Industrial Average
has tacked on 2.1% this month and rallied 16.4% in the past three months.

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