HOW BOEING MAKES MONEY
One of the top aerospace firms in the world, Boeing Co. (BA), develops and produces military and commercial airplanes, weapons systems, and strategic defense and intelligence technologies. The business provides funding for orders and delivery as well as services and support to clients worldwide. The U.S. government is one of Boeing's major clients.
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The European aerospace company Airbus SE, which specializes in commercial aircraft, is one of Boeing's greatest competitors (EADSY). Boeing's competitors in the aerospace industry are situated in China, Japan, and Russia. Additionally, prominent organizations including Lockheed Martin Corp. (LMT), Northrop Grumman Corp. (NOC), Raytheon Co. (RTX), General Dynamics Corp. (GD), U.K.-based BAE Systems PLC (BAESY), and Elon Musk's SpaceX compete with the company's defense and space businesses.
Boeing announced in late January financial data for Q4 of its 2021 fiscal year (FY), the three-month period ended Dec. 31, 2021. A decrease from the $8.4 billion net loss in the same quarter last year, the firm reported a net loss of $4.1 billion that was attributable to its shareholders. Falling to $14.8 billion, revenue decreased 3.3% year over year (YOY). For each of its business segments, Boeing measures profitability using earnings from operations. The corporation recorded a $4.2 billion loss from operations in the fourth quarter, which was less than the $8.0 billion loss from operations reported in the same quarter last year.
In its quarterly results release, Boeing noted improved deliveries and production of its 737 MAX aircraft, which the company has put back into service in almost all markets around the world. Early in 2019, the Federal Aviation Administration (FAA) ordered all 737 MAX planes to be grounded as a result of the plane being involved in two tragic crashes. The FAA removed its grounding order in late 2020, enabling the business to restart deliveries.
Due to problems with production quality, Boeing has also been forced to postpone deliveries of its 787 Dreamliner aircraft until May 2021. To resume airplane deliveries, the corporation is still addressing the problems. The demand for the company's commercial jets has been negatively impacted by the pandemic's effect on air travel demand. But since the constraints have been relaxed, demand is starting to increase again.
Commercial Airplanes (BCA), Defence, Space & Security (BDS), Global Services (BGS), and Boeing Capital (BCC) make up Boeing's four business segments. For each of these segments, the corporation gives a breakdown of sales and operating earnings. The above pie chart of earnings from operations excludes divisions like Boeing's Commercial Airplanes, which had a deficit for the quarter. The company also owns unallocated items, eliminations, and other categories, which reported revenue of -$173 million during the fourth quarter.
- Commercial Airplanes (BCA)
- The commercial airplane division of Boeing designs, manufactures, and sells jet commercial aircraft as well as offers fleet maintenance services, principally to the world's airline industries. The segment provides jetliners to satisfy the various passenger and cargo transportation needs of international airlines.
- Defence, Space & Security (BDS)
- The BDS division of Boeing conducts research, creates, manufactures, and improves strike, surveillance, and mobility military aircraft and weapons systems. Additionally, the segment conducts studies, develops, produces, and updates satellite systems, as well as tactical defense and intelligence systems. The U.S. Department of Defence is the segment's primary client.
- Global Services (BGS)
- The worldwide services division of Boeing provides services to both its commercial and defense clients all around the world. A vast range of platforms, systems, goods, and services are offered by this market. Engineering, maintenance and upgrades, upgrades and conversions, spare parts, pilot and maintenance training systems and services, data analytics, and digital services are a few of them.
- Boeing Capital (BCC)
- Boeing Capital oversees the parent company's entire finance exposure and offers financing to clients so they can purchase and receive their orders. The portfolio of the segment consists of investments, notes, and other receivables, assets held for sale or re-lease, and equipment under operating, sales-type, and finance leases.
