Rising High: Aircraft Manufacturer Celebrates a 57% Revenue Boost
The leading aircraft manufacturer is flying high as it announces significantly better sales in the last quarter than anticipated, marking a strong resurgence after a series of setbacks. The manufacturer's revenue in the final quarter was $23.9 billion, marking a 57% increase compared to the same period the previous year and exceeding market predictions. The cash flow of $400 million was also twice as much as expected.
CEO Expresses Optimism for the Future
The company's CEO is optimistic about the future, stating there's "a lot to be optimistic about" in the upcoming year. He warned, however, that the company's success also brings higher expectations. He emphasized that their clientele and stakeholders will be demanding more from the company this year.
Impressive Earnings Per Share
The company's adjusted earnings per share stood at $9.92, which included the effects of selling off its aircraft navigation unit. The company's commercial airplane revenue was $11.38 billion, beating the expected $10.72 billion. This signifies an almost 140% increase from the previous year. In addition, the defense unit's revenue increased by 37% compared to the last quarter of the prior year, reaching $7.42 billion.
Challenges in Delivering Delayed Aircraft
Despite its financial success, the company still faces the challenge of delivering delayed aircraft globally, some of which are still awaiting regulatory approval. The company delivered 600 airplanes last year, nearly doubling the number from the prior year and marking the highest figure since 2018. The leadership of the company has hinted at further increases in production in the coming months.
Deliveries are an essential aspect of the business as customers pay the majority of an aircraft's price upon receipt. This is a crucial step for the company, which has used up nearly $40 billion since the start of 2019 due to multiple crises, including two fatal crashes of its best-selling 737 Max and the ongoing Covid-19 pandemic. Additionally, supply chain and labor shortages and various production issues have continued to hinder the company's operations.
Competition with Airbus
Despite these challenges, the company managed to deliver 63 jetliners last month, 44 of which were 737 Maxes. However, Airbus still outperformed the company in total aircraft deliveries last year, with a total of 793. However, the company managed to secure more orders with a total of 1,173 compared to Airbus's 889. Airlines are planning for the future, securing delivery slots for growth and to replace older, less fuel-efficient planes. The company has secured orders from major airlines for deliveries in the next decade.
Looking Forward
Despite the company's success, it still faces several challenges, and investors are eagerly awaiting updates from the company's leadership on realistic delivery rates for the upcoming year. For instance, the company still needs approval from the Federal Aviation Administration for further Max increases beyond 42 per month. Investors are also keen to know the timeline for the long-delayed 737 Max 7 and Max 10 certification and the twin-engine 777X, which will be the largest wide-body in its lineup. The defense business, where there have been delays, including the two 747s that will serve as the next Air Force One aircraft, is another area of interest.
The company reported a net income of $8.22 billion, or $10.23 a share, a significant improvement from a loss of $3.86 billion, or a loss of $5.46 billion, the year prior.
The company's executives are expected to host an earnings conference call soon to discuss these results and provide further updates.