Earnings call transcript Q4 2022

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Operator

Thank you for standing by. Good day, everyone, and welcome to the Boeing Company's Fourth Quarter 2022 Earnings Conference Call. Today's call is being recorded. The management discussion and slide presentation, plus the analyst question-and-answer session are being broadcast live over the Internet. [Operator Instructions].

opening Mr. introductions, for call turning time, to over this remarks I'm and the At Vice of Welch, Matt President Company. the Boeing Investor Relations for Mr. ahead. Welch, go please

Matt Welch

and Thank follow and today Financial a are presentation Quarter Calhoun, Boeing's and slide Boeing's am you, Chief Chief Welcome Officer. today's Boeing's Dave Welch, Earnings reminder, Executive Executive and Officer; President Matt me Call. as I West, boeing.com. you and Fourth with and broadcast President morning. Brian can good And at XXXX to Vice

detailed financial always, information As today's is press included release. in

discussion estimates risks SEC projections, and forward-looking end Furthermore, goals in included web and those our statement in today's in the at the of involve described disclaimer the including filings presentation.

presentation and measures. addition, certain non-GAAP of for disclosures you we release In refer reconciliation to our and earnings

the Now over I Calhoun. to turn call will Dave

Dave Calhoun

guidance Good step delivered we us joining and to at for was us we Thanks, expectations is good first in for news view, you fourth to were this talk Xnd the morning. Thanks had of Matt. of together X-year, time XX-years November, in where a my stead in we chance the very all ahead. for about to morning. solid good all to a The of and the quarter-over-quarter the puts least have years meet that, Last guidance that had we my forward you. time,

course, good the and a we've lot restoring MAX moment. strength on we're way the financial our we we positioned have remain, well to the the feeling 'XX over big that, we're steps faced to beyond. only we and taken of three reduce for that operational well Not have to overall, importantly, 'XX prior years to and we last used way to our got we're closed but do, but risks about pretty Challenges

flow. free everybody Our is cash metric, key as knows,

positive progress turnaround in by fourth we generate in quarter free the were important flow billion the for more metric And in flow and XXXX, this since strong year importantly, time us. to for $X continued our us cash cash the demand. Importantly, full generate able very first a performance driven than helped

Several milestones I'd and like key events to highlight. that

the XXX tracks. to XX line the which know deliveries we everyone summer. Let's XX, in with as of delivery I start it the and the and target the was included we XXX over production XXXs had total December. of 'XX deliveries, delivered from BCA important Notably, XXX with exceeded our course return unwound inventory and XXX following the deliveries,

on strong most On the in the the Airlines on XXXX. the market front see net XXXX, the most More the recently very and XXX-plus continue since United and deal wide the bodies. driven by XXX, with XXX highlighted we MAX UAL, side, historic the very In we orders portfolio. to by order than sold year, December. XXX demand net across That's

fleet has More total stabilizing, broadly, XXX million Fleet to since safe and service, tremendous the It's it's surpassed now. XXX is is hours. X,XXX-plus X well. And our fleets. demand most the exceptionally airplane MAX strong. MAXs reliable delivered made team is progress. of We in Production return the performing the flight has

X,XXX MAX so. yet date. XX month gross returning overall steady and in achieved, prioritizing gone our which XXX to service a all have orders, we we're indication to another this And from more do to improvement we're we've business. China course to is stability, Production, X orders a in not of on but than

that, know that all we occurred. course, of month, This

guidance, as And deliveries we derisked or deliveries forward, start, going we any when airplanes to more of in have for back going service as may sort. knows I'm here just into may on before began our in the that Tarmac in We bring did to the we not have not China possibility. any guess U.S. everyone

MAX the mean the the and and approved that a end and means that That do attached and Boeing the legislation to certified. were very our existing can was XXX FAA at that of XX, that do these simply the that, extension remind application job way. got year. doesn't everyone It everybody we important X knows, right and moment. I'll follow it

for So, that I argument course every behalf our we that want filed the extension application that and derisked The very, will very we well. related be on with also point safety safety first. feel as to good made always and of out, about moment having we safety. will to premise first it chosen

Following defense.

emotional launch in inspiring. enormous SLS an for every step powered The a of And was which by the was and our success, company This NASA an than and succession rocket team launch. Starliner more broadly. the SLS broadly of It's the congratulate flawlessly beautifully team was for mission. incredible, November, upper went for I'd like little the to our and X it incredible almost Our Artemis way. the

we space disciplines, again, of accomplishment our that there's more that space. world patient a minds the shows So prove stay capable for we to just is to ultimately in significant we our in Boeing put it, follow travel what But again, rocket, general. to when do and

industry the another it the Global terrific in is Following world. general Services, simply in recovery story, and our following of everywhere

quarter pretty great a the much had across board. we So,

grow. to We continue

our to customers invest back to airlines support are bring were they as continue to where their before they so We prepared that we COVID.

for guidance. XXXX about operational November, we our and frame. financial with the as outlook progress, for and good shared we reaffirm includes well you in both that XXXX with the And and time ranges the flow, feel we'll So, that the the set this 'XX as we cash that delivery which

same, lines still to deliveries do chain we average face stoppages as difficult our a run few into are travel in And supply the met while shortfalls. supply objectives, not continue many realities simply difficult, we chain. that Our too so a we work our

stable think going So we those stoppages, are to they not forward. down about while rates are need be coming they as where

us the that improvements we're in outlined Know in everybody and you. not, them, all will working any supplier or within of is all to have chain. of amount focused of and with significant those discussions one There's the a that on rate between this I discussion we them. supply in between highlight transparency Q&A,

and year. things into on considered we stand very these heading strong portfolio, we're Demand, this where pretty few well last about feeling years, reflecting good All very positioned.

We portfolio have orders this plenty a all in number well of the some tests with we positioned. of faced and of our customers, world know toughest is around

generation of broadly development We have capabilities products. business, we're a defense prepare next pipeline innovating that including across our the and programs, us of for new robust

sustainable of technologies that's was view, by is ultimately to This required set Those flight up the more of commercial announced that, cut kind recently our wrapped are XX%. a a contract. launch significant the One achievements of demonstrator airplane in in emissions intending are standards to new by in fuel sustainability. NASA their to

our and we're to do, of We're lean kinds good our performance business, got set We're work out. we're really across that feeling productivity We've de ultimately aspects in future. improving. confident risked is to achieve but the to of We've team, and proud our major embedding progress. operations drive the the about of targets we've our

to With that, it over Brian I'll West. turn

Brian West

everyone. Great. Thanks, morning, and Dave, good

margin at results. financial came the XX% driven and up to higher in $XX year-over-year, commercial the go in billion. was quarter next fourth fourth by the Core That's Revenue page Let's cover operating were quarter the and margin and better was year $X.XX. costs. quarter the share share the than the Both in expenses and loss core X.X%, significantly per by and negative loss per period abnormal prior impacted volume.

the significantly versus through billion From versus business the up of quarter I'll positive perspective, was and prior our than strong year deliveries original and prior and sequentially go cash the each the take $X.X units. a free quarter, a for order flow better primary to our minute up bit higher metric on financial estimate. a activity

to on the next BCA. Moving page with

in deliveries, customer driven higher was up BCA $X.X billion. fourth considerations. the XX% XXX That's partially revenue XXX offset quarter XXX, by year-over-year by

X.X% the including quarter, singly margins, the On R&D ago year by higher spending. they driven negative a period abnormal the higher and better than expenses, and were in costs quarter operating in

XXX starting MAX in s, quarter for We in through the in XXX XXX. inventory, take the slightly were highlights deliveries minute customers had go of with XX programs, XXX fourth the the a few -X and I'll full we -XX major which XXX the estimate. our and of to We year with a ahead China. and airplanes had ended year, of for

fewer We delivered expect still do slightly will be expect from as combined the end airplanes XXXX. available, We be slow the with of some impact monthly airplanes deliveries inventory from will by the builds. to -XX most -X, inventoried

had we delivered XXX will deliveries fourth XXXX. most and the full by XXX, XX quarter in On year with We ended XX% be of of which the inventory, the year. in end airplanes the the for

increasing total per million production a $X.X accounting the total will than due temporarily in costs about the $XXX supplier to as to booked We by of under $X.X in month that We're quarter, to longer to the date million five the expected slowed bit billion. estimate has a be $XXX taking constraint billion roughly production. we rate abnormal abnormal

still We to per month this five year. expect hit

XXX quantity, of orders change flows. the airplanes accounting delivery year added XX the which XXXX total there XX quarter, is XX to margin. we've to guidance the to Our our program and no unchanged, GAAP and increases is in were cash strong

efforts the line and XXXX, time program the ongoing. holding On is are

estimate. $XXX and no billion change to costs there the quarter, is million total Abnormal in the $X.X were

programs. progress The continue resolving contractual settled. to MAX is XXX finish the with near good big issues On on line majority customer the settlement three we the the of customers front, vast make

of there's only original set Of $X.X billion the aside, left. the X%

far in which we've line the XXX, a agreement has with included program, in reached the a estimates. the MAX, we year our significant in customers are all several, stable. On fewer and been with very ago, already There provision

there customers the discussions are are ongoing. fewer and On even XXXX,

impact near- cash settlements all years mind long-term that revenue both contemplated in and will the several Keep in and the these over and financial of be guidance.

orders and over orders backlog $XXX quarter billion. the in XXX valued in we for booked on airplanes the X,XXX at front Finally, BCA, have

in services, to There Moving points And margins cover defense two margins fourth up the impacting on X% the the were X.X%. page, basis were include would next are you in quarter. margins I'll Operating billion, BDS BDS. be $X.X quarter revenues if year-over-year. BDS to things higher X%. XXX

supply First, operational constraints impact of in we labor chain felt the stability. and

stability pension saw both in in Second, to factory big improve we true-ups, the quarter costs that team the including flow timing leadership execution BDS and P&L certain accrual higher supply focus the the in for through adverse the of a base. cost

as very satellites, Artemis' November, moon aircrafts first XX three M PA to Some the including first Zealand X Dave successful we're including the quarter, the units. last delivered mentioned, in Power we as proud of New OXB the as mission X additional well and highlights, to

$XX at including during Air We for a XX an backlog award and Japan in billion. from Chinook Force. contract $X tankers the orders received The the BDS KC-XXA billion is Egyptian for from quarter. X helicopters

Services. by Moving Global to strong our quarter, operating and distribution margin billion, $X.X parts X% and the XX.X%. business. on primarily next was page, driven had BGS was year-over-year up revenue another BGS

Commercial was we the Germany in partially order up by billion U.S. some government softness for the is quarter, distribution depot strong, and Air space. Force, center. very during The We F-XX including billion. $XX the an orders offset BGS received in support volume the $X opened backlog

in results, loss the on full charges at year, a page. financial core $XX by impact lower driven volume, commercial and That's in revenue came earlier billion. to was $XX.X next worse defense negative the Core revenue. bit reflecting of share Moving over the defense up taken year. the operating by both year-over-year margin was higher Full X% the offset per X% year

generated free order from driven free the positive year on in prior we higher significantly billion by the up flow, year and flow activity. cash deliveries And cash $X.X

cash want to free in just Moving I on put of page. perspective. to flow $X.X next that the billion

improved still from see $XX billion three the billion over of cash, can we've a of in positive. XXXX a last of years. chart XXXX a was the made billion usage $X usage you As the of lot cash, was on $X.X left, progress XXXX, of but

work a is to to mentioned, pretty Dave proud of The As been back done territory. to get that's work do. team lot positive and more

momentum It's the XXX, It's the service book, to was that in our up customers' and been strong been we a lineup. incredibly expect been deliveries well. restarted. has to ramping. for It XXX order business been that's continue a our benefit and our very recovery to it's held XXXX, XXXX. been reflecting confidence of return the are with commercial good market the the course, service way exit It's a product along And

debt. and cash page, next the to on Moving

undrawn. billion, the we we the On securities $X ended $XX.X remain third cash and front, facilities, credit all quarter up billion had with billion marketable versus which of the $XX revolving of and year

debt. in to continues as investment-grade debt with $XX the a And top the rating we side, year priority. On credit billion a finished reminder, our be

near-term airplanes, cash, position maturities, pay continues we're very be and deliver down satisfying is comfortable to the and debt. Our plan strong, overall liquidity generate

the page, on Moving next to XXXX.

from November. We'll of financial XXXX. and about CapEx $X.X in for a outlook we in unchanged net billion between to in shared be flow what flow Our XXXX will for reinvest is Operating $X.X total $X.X billion cash $X billion. free billion $X in cash billion

demand As levels at and XX% globally. we're pass-through Global remains we of year, in strong. start increased XXXX, pre-pandemic the overall almost XX% traffic

If you number that XX%. over take out to China, grows

So, pretty our robust of demand order is and reflective book.

still with focused to at execution supply our to partners on meeting factory see Our be we chain, priority some the disruptions work And and issues continues customer our address in ultimately and the commitments. hard stability. while we're these

between we to billion as BGS will and generate will November, numbers generate of segment be $X $X cash. and the and billion of $X.X million billion, billion. billion On and BCA usage same cash between $X.X between $X.X operating BDS, a flow, expect $X.X

deliveries delivery airplanes, XXX and the added couple XXX expense and On airplanes, we've the commercial a front, unchanged are between deliveries XXX front. items and XX on XX unchanged and between of are XXX

will R&D in billion for in increase come The XXXX. vast $X.X be at about expect of We $X.X versus majority billion in to BCA. XXXX this

of We throughout eliminations note billion. at One XXXX will year also financials phasing, year. the similar course will other be as the very to with and relatively in to look improve will last in the have thing $X.X is important deliveries quarterly which the both on it line unallocated

good the XXXX. first flow. of the enter so XXXX. loss although quarter, still EPS focused cash the XQ a from will we it's we're a remain specifically, be on improvement an And in position. Overall, be in so And XXXX over cash first quarter On free will but squarely far usage an quarter first as improvement

our guidance. XXXX important Moving years. page be will it's that is on margins to cash note to are long-term you showed page, the objective. in over free XXXX, important, flow Same they two $XX still uneven of the November, last we next billion EPS and And but

As BCA BCA margins the and get the its inventory, back the abnormal trajectory. to on behind we put us, BDS track we unwind costs normal we

programs as is transition We're still four, we we from underpinned ramp. as to of Two, in key confident productivity. feel plan the Overall, good way by starting. control. development commercial back things the about that and services this rate we're production. the largely and Three, One, growth XXXX we're defense November, is today confident

final With that, I'll turn it over to Dave for comments. any

Dave Calhoun

Yes.

be job way we be Brian, think, environment. themselves. very our the also ahead more We We're closed we year We supply I couldn't pleased constrained, surprises. that chain year. with but going into that tough the the the know of It's the numbers is to heading speak to control with get it. for believe few and

happy We're you. thank questions. So, to some take

Operator

Peter from with go will [Operator first Please question Instructions] be ahead. Our Arment Baird.

Peter Arment

Good Brian. and morning, Dave

the free decade $XX fourth in obviously, free long-term the in and $X 'XX. of and $X cash quarter the in to congrats flow cash billion billion billion and the you reiterated, So flow the target progress in on the billings generation,

just So around guess, out, Brian, flow free on it's levels target BDS, risk I are specifically key the ranges? cash like talk confidence you kind at BCA that assume guidance call chain of 'XX, to around the maybe what supply and I can around expected

broadly month. and in XX flights show comment on that checks already are flights this you can China MAX as that February, in our but question, unrelated flights have Dave, in revenue just, there's then And the occurred scheduled pickup XXX

Thanks. that's activity China? up clearly, picking So there's MAX in

Dave Calhoun

Yes, start don't I Peter, why China. with

that going within on. are of my the what's numbers numbers, is range Your

be in terms knows, industry stressed event And world. a aviation. as major think China is already broadly everybody was up demand of going aviation in in of the the to opening I the

the So this everybody, MAX satisfy bump to importantly, need those is fly for within most demands. a but serious to China, they

the service. they and Tarmac going and what have the of them, So airplanes, full do one the readiness U.S. airplanes each into ultimately, on of focus is they're there the here do every revenue we were close getting to to we which on in today, XXX and

for I six think So focused the on. that's of months, to us for course all stay

going And a there deliveries. back. predict Peter, question that begins then of to want that odds go come And time to I take the day. where we're but up the up to every date, in is don't moment

back MAX into get on service Our we we and hopefully, gets airplanes have deliver customers. and to the that our tarmacs, ready our

I So, a think optimistic. to reason be there's

or actually guidance change and they will occur. outcomes until We not those predict

Brian West

the cash key the be the assumes do get much X% low the it the that the XXs the course at talked in of through about, we don't year, we low year. for X%, this whole to very first At The deliveries XXXX did then confident past says range. on half XXs again, Peter, will XX end, better XXs than we that low And and half. which actually that high the is with we underpinnings low flow, end we second feel

I that mix. So that is the of all within think

you is in big of MAXs, that much what the then for hit on we then product things to similarly, about most BCA, we which were much out playing XX% the we're two was an feel that still of those flow to $XXX trajectory recall, I XX%, million. XX change a the XX% being pretty indication to to where quite terms pretty And thought overall good kind to BDS, expected. no $XXX headed we December October good we about but And on cash the feel and landed not underpins lines. as it's we but One the bumpy, not over able we high, that the As hit still and had still December. caution stable, million of was that's

Peter Arment

Thanks. Appreciate color. the

Operator

go Bernstein. ahead. to next, we'll go Doug Harned And Please with

Doug Harned

from at now, a for delivery the XXXX a is right look When out don't news XX move And given or you and look had Thank higher, XX if you you that timeframe, can to there, you good and that at the XX month, production you up month. at have when assumption problem. guiding XX. our staffed is if demand you're were XXXX once morning. month in you you. as XXXX, the And is a to a MAX facilitized you're you guide engine Good

not territory. So that new be would

so, in see clearly, there issues if two So see? since 'XX, and want what look would feasible 'XX at go a from you production And assuming look rate that supplier what these that at to higher? I'm could it trying be get you when I to 'XX you supplier lot differently out And but we'd is at under are I'm is of years, these issues. 'XX,

Dave Calhoun

progress we'll we I two, chain put with much, and we are Yes, stable, conjecture the essential at Doug, achieve that of And too that again, through this the facilitized two the challenging of buffers one, don't be answer supply year, as adequate. in that the kind but we more want objective. are Number is, to going supply are to where to we respect things quarter-to-quarter, yes. kind far, Number and chain be place is, that by to predictable the month-to-month, rate?

tougher put. harder, a That's

stability. I I squarely just think we I all conjecture. But be for and do, right -- and now, question can take demonstrate to on of stability that will I And I it's ultimately do, we hope focused then if on us year that that going to to I'll take that, are get achieved.

quarter good. said, was our As fourth Brian

I can't with finished well. quarter, too just mean along many the December. a you month-to-month at look in the have you didn't But We lot in few that. the of if happy a stoppages be way. We surprises

not is we're we're And anything going our issues We're to that As not that philosophy to travel going compound you going occur. maintain to philosophy. know, anymore.

the you lot about. to to about consider watch month-to-month, tell So that's rates a our willingness the going talking you're

Doug Harned

there's of scenarios that do terms true? flexibility is just out to before given to How here production look levels? number think out 'XX when And there. you we of you And way be timeframe, obviously, come about long the 'XX, that get there a may go could a in

Dave Calhoun

that we of And ahead year stage? that. that will Yes, kind said, we'll to facilitized well will occur of things I be handle that. stay that as volume this demonstrate see you'll Well, over at that

it. that going we're So it's Again, back there have to -- not China. with that's worried factor will apply about. and a I'm questions. we'll have so to the of for we're I'm then back And to be believe respect We're part good. stability to

Doug Harned

you. Thank great. Okay,

Operator

Our next from Goldman Poponak is question Sachs. go ahead. Please Noah with

Noah Poponak

Can you're there be I Good new a morning, provide But Or hear that respect timing it I better? of heard wanted from mention you quality would that. the I into there everyone. pure happening what's you the And the and helpful. control is just more chain. you, but on any that on to a latest you if going in are incremental supply detail I OEMs? specific that ask little about XXX? not any Is visibility then supplier escape? Dave, to engine what could really better -- getting delays, Any sounded yesterday, detail hearing? what's guys

Dave Calhoun

the yet to will the of with And over that you that happy that, the with they course are Again, plans we which are but have about do start us are feeling kind me of into really planning year the progression we're confidence, suppliers built I'm rates our our transparency that at discussion. Let of going any to are that. what moment with when are we the think one. good for -- we don't I is it. will. we engine And and and get high guidance. on with rates the high I'm who to at the predominantly know of confidence engine we then occur And latter

we'll to one knows to market rates. can guessing no has achieve them we guessing so find been and and Everybody one's no end other. because second is the that then out But transparency strong, move each a the going them, depending got this we're continue get these out and rates, to forward. we'll low is on higher it. end on And fit we where We've if a amazing,

of until And good, to production lot our moment, we discussion. month a to get date but and going the until up hold see there's we're we you're to month XX that high Brian, on it confidence to So rate steady.

Brian West

Yes.

on XX, deliver it fourth and rate our airplanes, still able the real full of both so from a in also pretty the being as at inventory feels we good. part first And low inventoried into of an So while quarter was to quarter to responsibility go clear our the But in XXXX, remember, pretty that a have scope in do of we the what suppliers work terms reworking of have airplanes. is remember, their a scope.

longer bringing way the in to end so to make we why that to far shift the XX little year suppliers cards, protocols so sure originally along So in per going they've and get got expected, but to working take It's that the on month that conforming are a going is is bit to a the good. bit later they we're still which to us in suppliers, out, and see big the our all going five are something through. than XX done we place their

the to as XX up about. see and obviously feel the likely liquidation get the through we some you'll What into good year XX go of then net-net, good as still we year. inventory But ramp the deeper we the is factory

Operator

Myles Research. Walton from Please with is question ahead. Next go Wolfe

Myles Walton

morning. Good Thanks.

just in 'XX you for expectation the flow I Brian, couple if And XXX. XXXX? free on of rough cash? cash to unchanged also absorbed think $XXX Thanks. the can now defense, for abnormal higher touch mentioned magnitude on clarify One, Is things. you million then wanted a and Is that your profitability margin cost guidance? Just that

Brian West

Sure.

absorption, question, change in of impact. no is part just is So that significant cash not because the in of abnormal, that first we the -- in Part there of terms no that the cash there's cost just It's fixed XXX regard. but outlook. is

So we're holding.

the defense On margins.

mentioned, quarter, fourth So of around just some not and had in the of chain I constraints as well bump as of quarter, supply as accruals the some the timing from mentioned. labor, some the the that in we I

might margins but pretty of remind the expect be into get not way we customers. in what be performing move are feel lineup portfolio. going you way It's to about our the to it's we clearly we the to better. like, back those as is improved normal products all with incredibly As And to we going sequentially. the terms XXXX, And product good the well look that

positioned the we So the about into good will that year. margins as we're better, BDS base for is head feel and we get the underlying

Myles Walton

Alright. Thank you.

Operator

Liwag go we'll ahead. to Stanley. Next, go Kristine Please Morgan with

Kristine Liwag

Good morning, everyone. despite the term. Dave, in medium mentioned order milestone you the near uncertainty the from United and macroeconomic

And year? So pretty strong. talk rearview now we air United? landmark customers when for you the orders been orders? the new for look Can potential aircraft anticipate what BCA saying airlines has approaching a at Should the mean reopening, mirror, about I demand travel you China your we like are could more about see making COVID-XX at positive book-to-bill

Dave Calhoun

will we're hesitate time. long say been I more than a involved big I always in to forecast I orders Yes. in orders. that specific -- we've now again,

year orders folks last a that big think for was are out I there. big indicator

there considering things. big fact, U.S. Delta big as interest midst And outside United really indicative. But earlier, U.S. to of the is, the -- think say, majority the One inside some we're some And aviation, I'd in are in I those. some we're just now big opposed in the the -- of there's all

So the that new -- think real some never see do aim into difference, make going world made and markets. aviation not numbers the have global next But again, the some both a you'll you'll decisions optimistic. quarters, to manufacturers, that's see of I I'm to and healthy. to over entrants big yes, a because I'm forecast pretty I couple largely in

Kristine Liwag

these the follow-up, environment to Can you with robust. they compared describe levels? that do I you could described, sounds If that Thanks, pretty and Dave. environment orders a how it pre-COVID pricing for

Dave Calhoun

both out, one this you're it ruthless. been But moment. credit I Yes. of through I you Well, do manufacturers, it in it's the feels disciplined midst if balance and when COVID deal, really pretty any guess whole

want And constrained supply of so people the of you time of to we're get they norm. that see crazy and simply in they very now the are so comes. things know sort world when airplanes chain sort And that have that positions few reaches out where

way get to deliveries the for remember, seem don't we're and from five because Recessions competing years now. four in out

So into that. recession they're not computing really

So and again, I always that I disciplined. I'm guess it's a guess stay also -- good, will feel anyway, that pricing going -- to because

Kristine Liwag

you. Thank

Operator

And next, with Please JPMorgan. to ahead. Seifman go go we'll Seth

Seth Seifman

morning Good of very little bit a a this a much. And just quick than I Thanks morning. really, guess, question. clarification rather

guidance Just you're year moving on high sure is difference to production and deliveries understand When of between there. low and talking XXs high the deliveries say to end making the XXX. the this you assuming XXs

when with And you with see kind that's place to say in the regard get to this year, where hoping to production you some to stability a then are you production, regard factory. of that

that it that think higher where Is rate going unlikely that And a very out? XX% year. way make make about would delivery to the fair than shake so that is production of this -- seem things it regardless

Brian West

characterizing we more right inventoried course You're that the bit we'll year little as factory. move on of units opportunity airplanes, through fewer put of I have on delivery a that And would and will come say the framework. the the out

stick and at We'll higher. So see. production the rate to get for going wait right the range We're now. to moment just could

Dave Calhoun

end we're low the of that And shooting as range. reminder a not the for

Seth Seifman

how right. improvement needs the stability any say that's far improvement looking in this supply productivity? point you come chain versus as in that for, And that from the internal you're Right, necessary as at much would to

Dave Calhoun

cetera, to the cash mostly internally. out all driving buffers in own right that want practices cycle would a we et suggest really opportunities things that you Look, I have company don't do, and flow creating We don't Yes. our lean. that positions,

make improvements will we there. So

and the to lion's supply going rates. new capability said, ability chain to literally be discussions the move as supply capacity of And capacity, availability, around the But through labor the It's the the meet entirely year. chain rate as built the and transparent we of very course of around labor the built trained that discussions. share is I almost

the Hiring sophisticated about we hire to constraint getting that the and do able people are ready work training not them they all is demand. anymore. getting a them to the It's ultimately People need.

Seth Seifman

Thank you.

Operator

Please von Cai Cowen. next, go Rumohr we with And to ahead. go

Cai von Rumohr

how Could as to part update to and the certification allow that, as the as much. XXXX? the of agreement push your the us you out very you Yes. you certify on MAX Thank X to date And the well think existing XX to fleet. X Could efforts XX, changes tell did Thanks. the the us I some the to agreed that's you backfit When much of MAX you you cost? impact? take likely on and software accounting

Dave Calhoun

that I'll small. fourth behind fleet to The quarter. the that off get in table. was of provision to was That's us. take the last the retrofit taken It part the

and knows legislation. just purely And it's was argument important get why in extensions there's understands in But everybody hope reason I the a a place to how small. those The argument. it I -- safety was

aisle, we a both Fortunately, the it got of done. on we sides of got and lot support

So existing feel certified airplanes this gives get we to good under us applications all that. these the the and flexibility we need about

We think probably next X will this first XX for the flights for and the year. be year

where we like that nobody down. ever pencils the put So calm, stands. Everybody's FAA,

to to going not when like progress. expect to And we're we those we're So always, exact as going dates tell certifications. you just

So be DASHXX And to the cockpit those several was put improvements incorporated then and the our useful fleet software everybody into over the will legislation all that into adjustments that included years. feels MAX on approved largely some we helpful And entire agrees that yes, pilots. good. are

As we or the a in but those Brian we're objectives can said, for number, the two. and here provided those meet not confident CERT are accomplished provided it's we improvements and next large year it,

Cai von Rumohr

the XXXX? And

Dave Calhoun

think the course Everything agreement issue ASO our of the created couple only with some No, been has has concern think design ASO. approach on set, we're our the we some we that I'm staying to the the and I the so we're with principles have sorry. and on will for And coordinated of regulatory progress a think targets. terrific last And over making I that is XXXX. years

Cai von Rumohr

you. Thank

Operator

Strauss And next, we'll Please ahead. with Barclays. to go go David

David Strauss

the pickup XX? quarter, just balance the you the morning. we that XXX deliveries taking touch for just you touch quarter? in the the higher Brian, on the is going related the also, big in BCA to for forward the on cash question. XXX Could Thanks. the if could on unit Thanks the deferred in pickup Good outlook what loss, saw that that large in means And

Brian West

Yes.

by airplanes. on basically amplified base mentioned cost under sitting production balance, that's that all margins, has the I extension On the and finished the on XXX goods there that's impact program an deferred the inventory that's

increase. considerations. of And driving and by the the basically, that's question, customer and impact last your concessions impacted it's So mix customer

David Strauss

-- quick Okay. the on follow-up to And a said you China airplanes remarket in looking I think XXX you inventory. still those? Are

Dave Calhoun

results that until of with be you until partially. wants completely to get now, the when as understand China pause on can the of assume where only that respect we -- effort, of will you to that but And Yes, we go. sort see

a is So do. you'll see And see you'll pause can good also what but and that's China hopefully, the wants that discern to so news. we yes, answer progress

David Strauss

Thank you.

Operator

from Citi. go is question ahead. Please next with Gursky Jason Our

Jason Gursky

Good that clarification get tick but And on Brian, in one you the margins expect to a quick then everybody. at are 'XX, rates question BDS services a you up basis. normalized over just that mentioned and a morning, back business. don't long-term the margin on clarification,

to going rate Just those us business. expectations just for 'XX to curious then services watching on on rates? color your to and margins? for be are on what Thanks. regard expectations a be to And for with the more out the back little getting bit growth normalized on Maybe milestones

Brian West

sure. Yes,

On the BDS.

we've world, digits, same in availability in BCA But as labor So mentioned, as we've about. constraints is the single well. long the what the supply you term, near of role chain term, the talked BDS about that and high impact talked kind

will current be that environment constrained the when benefit. is a less So stabilizes, and

big, the just We expect be partly that we're a watch it the to thing as margins the happen get keeping going important The chain is in supply is remains seen, to but stability And going but big be it accelerate. of better to time our key the to XXXX, will will to eye and tend on. XXXX. pace be that's to in deal

going and recovery, so a enjoyed XXXX. that we the big pretty the commercial of the BGS, the on to pretty at basis. they the business. side, of revenue, services in their to for part quarter in based a On terms we clean year was good have had -- and But finished spot It's services that benefit of

just about see you a that XXXX that of where would into you good by gives for. you pretty as think quarter kind growth we And view how coming if extrapolate of

grow, margin mid-teen within will right enjoyed. just that levels be it that will we've fine So

good So prospects about the continue of the we grow, surprises. feel pretty service business, no stable, to very

Jason Gursky

Great. Thank you.

Operator

we'll America. Next, Epstein to Bank Ron Please go ahead. go of with

RonEpstein

Good morning, everyone.

Just be you that going until Day thinking of Like think and the be in middle market How the Investor so circling should recent wouldn't with development so forward light the and -- means? probably the the forth. happen on program that that win doing -- the NASA to with trust looking brace trust that the Or new you in Boeing a mentioned back of on about sometime we on early platform? new? and a technology on that at technology product about product in XXXXs. based about world confident you Could transonic for what something win what feel some to are

Dave Calhoun

Yes.

truly So Ron, are think three a going to going new things to highlight product. I contribute differentiated that I'm to

refer so the is to that trust them I'll of One wing, now.

how et it. in into airplanes? do so able new right that that's program you we cetera, to through of put the to be commercialize on So decade intent here we've been alongside embarked do How that can real incorporated set know, worked there the technology part the As that, you tests, of for is there's it? of better be NASA. is a And it on fact, do

is the not a of and/or play in a be role world. to to wide-body, market the good for it narrow-body as have but will definitely someday applicable it I'm and/or sure middle going

the about Number So digital that's being servicing. create for thread factory not heard the one. for to the airplane, but number digital us two, talk the model, able you've just the and for

teeth lot all day, frankly, been we are will than a airplane way on of will couple every defense digital be it's far whatever programs. our more in programs we're learning a commercial defense that what discrete on next day, that that, threat. really it cutting so the mature incorporate But so we do And our

day usually and propulsion So opportunity good to that then a better that's but you last bypass a anyway, this because technologies, case, the from element to the and has ratios, I carried the distance than setup a trusting that extent wing major ground. And contribute simply one setup, that. think the day, very the about been I simply feel will know today's create will greater bigger of probably far trusting in

And is proven new have you airplane, when why in reasons lots kind think are and technologies will these you're a the there XX% we're the do of think be considering today. I what to any for think So focused this. can our somewhere view, And of be about ultimately XX-year adapted. time and has XX% and to technologies And have it I program than that's the and between play it And out. to objective we to better on.

Ron Epstein

people. bridge? try market mean go And a Got 'XX? needs you doing to are how that thinking of it. hear And in I headcount kind go chain, more what been you across quick we as follow-on. labor if just What cross has everybody are I how about for -- And to is the supply it has we you the detailed which it headcount into projections can, productions Boeing? as been

Dave Calhoun

want clear. Ron, be Yes. to I

above hiring on, apparatus days were at we We're little We of none. the or lot because and do so people all guys we've where have sort going a it. there required you many had trouble remember got no rework a people, of are in of to these

what actually years. So our issues folks the over is to couple the the learning of have will next the rework job demographic displace that from and all who are just we incorporate retirements have, whatever doing that take we or

to the mechanism pretty a is mechanism man, good front, run service joint train good train labor verification, our And do these people had a have good real the with job. engineering good aircraft return hiring mechanics, and on a XX,XXX. pretty setup We to over ironically a the and pretty on to we've

Our we get them them right, train job just get involved early is life. that and to on sure the make

So demand. not big a we are facing

fighting out. are training Tier anymore. Xs, doubt about that And in. up. working is bit, filling chains any ease the ease really I as supply chain Our all of training really important it's the thing It's of still a the hiring up bringing that like year, in their the as now talent for probably I last and think they're I've this supply nowhere seen the them near -- but that, underneath really development. people are

Ron Epstein

it. Got Thank you.

Operator

And ahead. go next, Partners. Seaport Rich Safran we'll to Please Research go with

RichSafran

good and Brian Matt, morning. Dave,

AIA we were going not to to defense. defense opportunity you C-XXX discuss should be wanted like I Just that know, you and could be So portfolio, you're discussing the surprised, to example, what I your broadly focusing about noticed on? ask C-XX set by you I'd first, recap. a

we production selling could the terms the if on of margins also older to deliveries, you you for discuss in also FMS? F-XXEX might be what Thanks. when program were models comparable Second saw And program that, rates? expectations to under

Dave Calhoun

Yes.

So let me take this one.

I difficulties me feel and had way. feel it to there are which of Let more In really good address as we've I exposure with exposure, why development broadly, the at a portfolio of the the the fixed-price I consider contracting opposed contracts, a light level. portfolio that about reasons portfolio

talk forward. I autonomy members And airplane invested we're about. know, of the requirements Navy you making we're you Force, both the as those that Air forces. and believe invested, to sure to respect we teaming progress with fully and one of fighting with And I'm of already be drivers We're development, autonomy. real the real going know are going programs

And about, about. which we're excited if talk more there others are excited, not we as can't

portfolio really all I these we've good about. long years, sustained the and the feel So that development over

It's way We for have important TX trainer. more itself. the market the just than trainers

how all of about and we perfect use the think to need that's to it's the teaching how can that production trend. advantage the you it's Force, technologies it's teaching customers more digital thread, to our thread. the an maybe do us for think used full and things child of derivative about. for it's absolute -- it even what digital Air the importantly, take our we digital And But as be Ultimately, I'm to know a poster sure other

customers. feeling out, if as just you derivatives new we feel are. of about I our the And they We So where are I'm the this at rates our future. very F-XX -- look to good but point sort our frankly, from boy, as -- really fleets, important the out I wing about perspective, U.S. our demand. demand great as platform, the new production good It at feel feels like well to pretty not international stage, our the about going hand my we're a

the the know, we time of other the I where only in the development and over work market. you quite to Anyway, it. good light this stand gets, really frankly, in until feel valuable And new ultimately classified It's brought choices, more completed portfolio. about was

the of difficult which methods contracting here, about but talking strongly contracting we sorry, can't the used are. very, And are where I moment we I'm some off all very get And the tanker, still that we we in the going anyway, early page for and, again, without believe us.

fantastic. On the Air other the been hand, Force has futility to

believe need refueling. to technologies things we and fully are allow The it industry with our the then and and growth that customer. our in, autonomous of the invested commitment even Vision beyond we're the for in system These

with Boeing's are So anyway, there's to probably to things, that, you but and reason good, know development feel frankly, a on lot respect of other front a defense business. the there

Rich Safran

Thanks for Dave. that,

Brian West

we one question. John, more for time have

Operator

go Jefferies. with and Kahyaoglu that Sheila Please be ahead. Certainly, will from

Sheila Kahyaoglu

ways, And you. I Good a morning, been know don't I different I thank it's if thousand asked answer guys. but know the yet. know

per out cash think how cadence of we of give aircraft production flow and a how is supply about aircraft get as idea And So where impacts and you that cash as -- rates pricing are increasing, maybe, XXX Or free an MAX peak? inventory. just profitability, chain Dave, you a of that there is the you us can on prior below far from perspective?

Dave Calhoun

Let with cash XXX. a me I'll at the margins, talk the shot let's -- take start and

be and pricing they're the got in term, back Dash through they're describing. productivity, near term, higher In work driven were been the we've things positive, XXXX, that model. XX pressured they So but to long in we to all going by than

the the So stuff it's verge the doing real over some special on feels term. XX long like of

to the going remarketing. because pressure customer some impact talked some mix chain we're XX, about, things to things that all the near-term we supply On impossibly battle through

being line the in productivity it's And to more term, rate with less before and long was the benefit and then going or it be the ramp. what

of over about perspective. those cash two time from a kind that's we think So how programs

Brian West

clear all and Really -- a cloud, that have really think to of and our end I of the we tail that Sheila, will 'XX. the apparent lumpiness 'XX. along then you be we -- things on, things the clarity calendar been wrestling 'XX of a to as the everybody. get begins lot think impact And we've way, margins the that the the And as through to that get to about lot with, year

Sheila Kahyaoglu

you. Thank Great.

Matt Welch

for And earnings that call. fourth joining. quarter our XXXX you concludes Thank

Dave Calhoun

Thanks, everyone.

The Boeing Company (BA) 25 Jan 232022 Q4 Earnings call transcript