Boeing Expected to Have Best Q1 Since 2019

Boeing (BA), the world’s second-largest maker of commercial jets, is set to post its best first-quarter results in three years as it reemerges from the gloom of two fatal crashes and Covid-19.

Revenue is expected to be $17.7 billion in the first quarter, a jump of 26% from the prior year, according to estimates compiled by Visible Alpha. That would be Boeing’s best first quarter since 2019. Boeing is expected to report a loss of 98 cents per share, also its best first quarter since 2019, and an improvement of almost 65% over last year. Boeing will report earnings before markets open Wednesday.

The company is projected to have sold 131 commercial jets last quarter, up from 95 deliveries a year ago, helping to grow segment revenue 77% to $7.4 billion. The company is also expected to grow its defense, space, and security revenue by more than 5% to $5.8 billion.

With the increased production also comes higher expenses, as Boeing’s costs are also expected to increase 15% from the 2022 first quarter to reach $17.8 billion. 

Production delays cost Boeing market share to its primary rival, European aircraft maker Airbus (EADSY). Airbus sold 820 aircraft in 2022 compared with Boeing’s 774. Though Boeing delivered three more commercial jets than Airbus in the most recent quarter.

The company’s fortunes are partly tied to its primary customers: airlines. Air travel demand resurged last year, returning major airlines to profitability after years of losses. In the most recent quarter, Delta’s profits were lower-than-expected, and United Airlines reported a loss, but the first quarter is historically the worst for airlines. Both companies forecast strong demand through peak travel season.

In 2023, Boeing shares have risen 8% this year, outperforming the benchmark S&P 500 Industrials Sector, which has returned just over 3%. 

Key Metric: Commercial Deliveries

Boeing’s deliveries were hampered in 2020 and 2021 after two crashes of its premier 737 Max aircraft killed 346 people and prompted a worldwide grounding of the aircraft that lasted more than a year.

The company said earlier this month it delivered 130 commercial airplanes in the first quarter. Of that total, 113 were 737 MAXs—more than 30% growth over the same period last year. After restarting production of its 787 Dreamliner in the second half of last year, Boeing delivered 11 Dreamliners in the quarter, down from 22 in the previous quarter.

Boeing suffered another production setback earlier this month when it ran into a supply quality issue associated with the 737 MAX. The issue didn’t affect safety, and would delay production by only weeks, CEO Dave Calhoun reportedly told shareholders at the annual meeting, before he forecast that production rates for the 737 MAX were on track to rise higher this year.