Planemaker Boeing swings to quarterly profit on unit sale

A Boeing 737 Max jet prepares to land at Boeing Field following a test flight in Seattle. (AP Photo/Elaine Thompson, File)

Boeing swung to a fourth-quarter profit on Tuesday, driven by the sale of its navigation software services provider, as well as rising jet output and stronger deliveries.

The company also recorded a $565 million charge on its KC-46 aerial-refueling tanker program due to higher estimated production support and supply chain costs.

While the profit swing was due to the unit sale, Boeing continued to increase output of its two most popular jetliners - the 737 MAX and 787 - and to resolve quality problems that have caused significant delivery delays at the planemaker over the last few years.

737 MAX output reaches 42 a month

Boeing ended the year with 737 MAX production of 42 airplanes per month and is in the process of raising the 787 rate to eight a month.

The planemaker earned a net profit of US$8.22 billion, or $10.23 per share, for the quarter through December, compared with a loss of $3.86 billion, or $5.46 per share, a year earlier.

Despite the production improvements, Boeing’s commercial airplane unit posted a quarterly loss of $632 million. Boeing’s defense and space unit lost $507 million.

The company’s shares were down about one per cent in premarket trade.

The quarterly results included the Jeppesen sale to Thoma Bravo for $10.6 billion in cash and the reacquisition of Spirit AeroSystems for $4.7 billion in stock. Boeing paid down Spirit’s debt by more than $3 billion, resulting in a net gain of about $7.6 billion.

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Across all jet programs, the company delivered 600 airliners last year, its most since 2018. In the intervening years, Boeing was battered by the 737 MAX scandal, the pandemic, supply chain bottlenecks, a mid-air accident that exposed systemic quality and safety problems, and labor problems.

“With progress comes expectations, and our customers and stakeholders are going to expect more from us this year,” Boeing CEO Kelly Ortberg said in a memo to employees on Tuesday. “And we should expect more from each other.”

He said the company needs to certify the 737-7, 737-10 and 777X and to make progress on fixed-cost defense and space programs that are behind schedule and have cost Boeing billions.

In what has been a tumultuous first year for Ortberg, Boeing settled a prolonged labor strike in its defense business and reached a deal with the U.S. Justice Department to avoid criminal prosecution over two fatal crashes of 737 MAX.

Boeing brought in $375 million in cash in the fourth quarter, but it still burned $1.9 billion in cash for the year, in part due to ongoing certification delays on the 737 MAX and 777X programs.

Boeing’s fourth-quarter revenue rose 57 per cent to $23.95 billion compared with expectations of about $22.6 billion, according to data compiled by LSEG.

(Reporting by Nathan Gomes in Bengaluru and Dan Catchpole in Seattle; Editing by Anil D’Silva, Rod Nickel)