The 737 MAX jet, production quality, new regulatory oversight, the commercial aerospace recovery, new jet approvals, and defense- business profit margins are all areas of interest. All that means it should be interesting when Boeing reports its fourth-quarter numbers on Wednesday morning.
For the quarter, Wall Street is looking for a per-share loss of about 76 cents from sales of $21.1 billion, according to Bloomberg. A year ago, Boeing lost $1.75 a share from about $20 billion in sales.
Boeing’s commercial airplane business continues to lose money as it continues to recover from the COVID-19 pandemic and the worldwide MAX grounding that lasted from March 2019 to November 2020.
Boeing delivered 157 aircraft in the fourth quarter, including 107 MAX jets, compared with 152 jets, including 107 MAXes, in the fourth quarter of 2022. For the full year, Boeing delivered 528 planes, including 387 MAX jets, up from 480 planes, including 374 MAX jets, in 2022.
For 2024, Wall Street projects about 530 jets delivered, including some 400 MAX jets. Delivery guidance should come up on management’s conference call at 10:30 a.m. Eastern time.
Boeing’s defense business has also lost money in three of the past four quarters. Fixed-price contracts and high inflation have squeezed profitability at defense contractors recently. Investors will want to see signs of stabilization there.
Boeing should also tell investors what to expect in terms of full-year free cash flow. For 2023, Boeing projected free cash flow of $3 billion to $5 billion. Wall Street is modeling $3.5 billion, including $2.1 billion in free cash flow for the fourth quarter. For 2024, Wall Street is looking for about $5.8 billion.
Outside of those numbers — the typical recitation of data for an earnings report — investors will want to hear about how Boeing plans to deal with increased regulatory oversight. The Federal Aviation Administration has said it won’t allow Boeing to boost its production rate for 737 MAX jets until it is satisfied with Boeing’s manufacturing and quality-control system.
That statement came after a 737 MAX 9 emergency-door plug blew out on Jan. 5, leaving a hole in the side of the plane and forcing an Alaska Air flight to make an emergency landing. The regulator’s immediate response was to ground MAX 9 jets, allowing the planes to fly again only once they are inspected and any problems found are corrected.
Boeing wants to start producing more MAX jets to meet higher demand. Its goal was to take MAX production up from about 38 a month to 50-plus in a couple of years. If Boeing will adjust that goal remains to be seen.
Boeing also has two MAX versions that have yet to be approved for commercial service — the MAX 7 and MAX 10. When those planes might be ready for delivery to customers is also a key question for investors.
Options markets imply the stock will move about 4%, up or down, following earnings. Shares have moved an average of about 3%, up or down, following the past four quarterly reports. Shares have risen three times and fallen once.
Coming into Wednesday trading, Boeing stock was off about 20% since the door-plug failure. The S&P 500 and Nasdaq Composite are up about 4% and 6%, respectively, over the same span.
Write to Al Root at allen.root@dowjones.com