Boeing Reports $1.76 Loss Per Share on $16.23B Revenue in Q1 2023 Amid 737 Max Safety Crisis

Boeing reports $1.76 loss per share, depletes $4B in cash, as 737 Max crisis and production slowdown weigh heavily on the aerospace giant's finances.

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Nasiru Eneji Abdulrasheed
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Boeing Reports $1.76 Loss Per Share on $16.23B Revenue in Q1 2023 Amid 737 Max Safety Crisis

Boeing Reports $1.76 Loss Per Share on $16.23B Revenue in Q1 2023 Amid 737 Max Safety Crisis

Boeing reported a substantial loss of $1.76 per share on revenue of $16.23 billion in the first quarter of 2023, falling short of expectations as the company confronts the ongoing 737 Max safety crisis and production slowdown. The aerospace giant depleted nearly $4 billion in cash during the quarter, with its stock price plummeting over 35% year-to-date.

The dismal financial results were primarily driven by the Commercial Airplanes segment, which saw a 31% decrease in revenue to $4.7 billion due to lower 737 deliveries. Boeing shipped just 67 737 Max aircraft in Q1, a significant drop from the previous year. The company has taken actions to slow down 737 production in order to drive improvements in quality and strengthen its safety management systems following the suspension of the aircraft in the wake of two fatal crashes.

Boeing CEO Dave Calhoun acknowledged the company is facing a "tough moment" but expressed confidence in its future, emphasizing that safety and quality will remain top priorities. "The first quarter results reflect the immediate actions taken to slow down 737 production in order to drive improvements in quality and strengthen our quality and safety management systems, which will position us for a stronger and more stable future," Calhoun stated.

Why this matters: The 737 Max safety crisis has had far-reaching consequences for Boeing, its suppliers, airlines, and the broader aviation industry. The company's ability to manage this crisis, restore confidence in its aircraft, and improve production quality will be critical to its long-term financial health and reputation.

Boeing's troubles escalated in early 2024 when an Alaska Airlines 737 9 MAX jet suffered a high-profile door plug blowout, leading to increased scrutiny of the company's production and safety processes. The Federal Aviation Administration (FAA) has imposed a production cap on the 737 Max line and is requiring Boeing to address systemic quality-control issues. Despite the challenges, Boeing still secured 131 gross orders in Q1, with its commercial order backlog sitting at 5,591 planes worth approximately $448 billion. However, analysts predict Boeing will take longer than expected to reach its $10 billion free cash flow target as it works to stabilize the supply chain and improve production quality.

Key Takeaways

  • Boeing reported a $1.76 per share loss in Q1 2023, missing expectations.
  • Boeing burned $4 billion in cash, with stock price down over 35% YTD.
  • 737 Max deliveries dropped 31% due to production slowdown for quality improvements.
  • Boeing CEO acknowledges "tough moment" but confident in future safety focus.
  • FAA imposed 737 Max production cap, Boeing to take longer to reach $10B FCF.