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Boeing’s price appreciation after greater than expected loss and revenue failure, but free cash flow beat

Shares of Boeing Co. BA,
+ 0.37%
rose 1.3% in premarket trading on Wednesday, after the aerospace and defense giant reported a much greater than expected loss amid a major miss in commercial aircraft revenues, but reported free cash flow that was much less negative. The net loss decreased to $ 2.38 billion, or $ 4.20 per share, from $ 2.94 billion, or $ 5.21 per share, in the same period last year. Excluding one-off items, core loss per share decreased from $ 5.82 to $ 4.79, but far exceeded the FactSet consensus for a loss of $ 2.57 as results were “significantly impacted” by the COVID-19 and the 737 MAX ground. Revenue was down 25% to $ 11.81 billion, under FactSet’s $ 12.95 billion consensus. Among Boeing’s business segments, Commercial Airplanes revenues decreased 65% to $ 1.63 billion, under FactSet’s consensus of $ 2.91 billion; Defense, Space and Security revenues had changed little: $ 6.59 billion, just below expectations of $ 6.62 billion; and Global Services revenue decreased 23% to $ 3.49 billion, below expectations of $ 3.68 billion. Free cash flow was a negative $ 5.63 billion, exceeding the FactSet consensus of negative $ 6.67 billion. Boeing said it will reduce production speed for 787 aircraft to 6 per month in 2021, from previous guidelines for a gradual reduction to 7 per month in 2022 from 10 in late 2020. Production speed for 777 / 777X aircraft was reduced to 2 per month. from 3 per month. The production rate of 737 is expected to gradually increase to 31 per month in early 2022. The stock has fallen by 47.6% through Tuesday, while the Dow Jones Industrial Average DJIA,
-0.77%
lost 7.6%.

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