Boeing Co (NYSE:BA, ETR:BCO) preannounced poor quarterly results for the fourth quarter last week, ahead of the release of its full report on Tuesday, January 28.
The aircraft maker said revenues would be $15.18 billion, down 31.1% year-over-year, with loss per share of $5.46.
Wall Street analysts expect an adjusted loss per share of $2.93.
Analysts at Agency Partners see a number of issues arising from the quarterly results.
“There is little sign so far that the problem programs have improved, so continuing losses and quarterly charges are still occurring at the same rate as before the change in management,” the analysts wrote in a note.
“It clearly takes time to fix big problem programs, but there is not even a hint yet as to when things will start to get better.”
They also expressed skepticisim that Boeing and its supply chains could ramp up production to target rates before demand falls off amid a normal cyclical aviation slowdown.
“The production restart of MAX and other commercial programs post the strike and the production safety issues has been extraordinarily slow, making future production targets seem all but unattainable on any realistic time scale,” they wrote.
“Even the 30 plus a month MAX delivery rate achieved just before the strike last year, or just before the Alaskan door incident, included at least a third that came from aircraft that were already in inventory, so new build has only reached around 20 a month so far, implying the need to almost double the rate to get to the intermediate 38 a month target, and almost triple to get to the 50 plus ultimate target.”
They added that Boeing’s management may need to remain in “firefighting mode” for some time yet.
“There is an opportunity tomorrow for Boeing’s new management to start the process of laying out a route map to recovery and to tell the world what a recovered Boeing might look like, but the depth of the problems revealed over recent quarters and scale of the challenge is such that it is probably too early to do that,” they wrote.
Analysts awarded Boeing a ‘hold’ rating and a $166 price target. Shares traded at approximately $175 in the early afternoon on Monday.
“Boeing is not a classical recovery play and there is nothing to play for in the medium to long-term making it a ‘hold’ at best,” they concluded.