An American manufacturer of aircraft, The Boeing Company, released weaker-than-expected operating results for the third quarter of this year on Wednesday. The defense, space, and security industries suffered large losses, which had a detrimental effect on overall performance.

In comparison to losses of 132 million US dollars in the same quarter last year, Boeing recorded net losses of 3.3 billion US dollars in the third quarter. The actual adjusted losses per share were $6.18, as opposed to the projected adjusted profit per share of $0.07.

Boeing Defense, Space & Security Q3-2022 Report 

Defense, Space & Security’s third-quarter revenue fell to $5.3 billion, and its operating margin dropped to (52.7%) percent as a result of $2.8 billion in losses on specific fixed-price development programs that were brought on by higher anticipated manufacturing and supply chain costs as well as technical difficulties. The KC-46A, VC-25B, MQ-25, T-7A, and Commercial Crew programs all noted these losses. Poor performance on other initiatives also had an impact on the results.

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Poland chose the AH-64E Apache as its future attack helicopter during the quarter, and Defense, Space & Security won KC-46A Tanker awards from the Israeli Air Force for four aircraft and the U.S. Air Force for 15 aircraft. 34 aircraft and two satellites, including the first four MH-139A Grey Wolf helicopters for the U.S. Air Force, were delivered by Defense, Space & Security. Defense, Space, and Security also inaugurated the Advanced Composite Fabrication Center in Mesa, Arizona, during the quarter.

Defense, Space & Security’s backlog was $55 billion, with orders from customers outside the United States accounting for 31% of that total.

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Despite challenges, Boeing Defense, Space and Security business was also able to meet key milestones and generate strong orders. Notably, we delivered four MH-139A Grey Wolf test aircraft to the U.S. Air Force, and received contracts for additional KC-46A tankers for both the U.S. Air Force and the Israeli Air Force. We were also honored that the Government of Poland selected our AH-64E Apache for the Polish Armed Forces’ new attack helicopter fleet.

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Boeing CEO Dave Calhoun’s statement on the Q3 report

We continue to make important strides in our turnaround effort as we drive stability and focus on performance. That said, we remain in a challenging environment and have more work ahead to ensure we’re consistently delivering on our commitments and reestablishing the strength of our company.

This is reflected in the third-quarter results that we’re sharing today. As we begin to hit key operational milestones, we were able to generate $2.9 billion in free cash flow in the quarter. This sets us on a very solid path to achieving positive free cash flow for 2022, which has been our leading financial metric for the year.

While our cash generation was strong, our revenue and earnings were significantly impacted by losses on fixed-price development programs in our defense business, driven by higher estimated manufacturing and supply chain costs, as well as technical challenges. We’re squarely focused on maturing these programs, mitigating risks, and delivering for our customers and their important missions.

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