Boeing Records $93M Charge on Commercial Crew Program in Q2
Revenues at Boeing Defense, Space & Security fell 10% in the second quarter of 2022, and the segment recorded a $93 million charge on the Commercial Crew program for NASA.
The Commercial Crew charge was due to launch manifest updates and additional costs associated with the second Starliner crew vehicle test completed in May. The Orbital Flight Test-2 (OFT-2) for Starliner is part of NASA’s Commercial Crew program to transport crew to the International Space Station (ISS). The uncrewed test in May was a repeat of the December 2019 first test that did not dock with the ISS, and it was successful. Boeing previously took a $185 million charge in the third quarter of 2021 for the same test.
Revenue for the Defense, Space & Security segment in the second quarter was $6.2 million, compared to $6.9 million in the same time last year. Boeing explained that the drop in revenue was driven by charges on fixed-price development programs, including MQ-25 and Commercial Crew, as well as unfavorable performance on other programs and lower volume on derivative aircraft programs.
Backlog at Defense, Space & Security stands at $55 billion, with 33% representing orders from customers outside the U.S.
Overall, Boeing saw a dip in revenues in the second quarter, but Defense, Space & Security performed worse than the full company. Boeing reported $16.7 billion in revenue, down 2% compared to the prior year.
Net earnings were $160 million compared to $567 million in the second quarter last year.
“We made important progress across key programs in the second quarter and are building momentum in our turnaround,” said Dave Calhoun, Boeing president and CEO. “As we begin to hit key milestones, we were able to generate positive operating cash flow this quarter and remain on track to achieve positive free cash flow for 2022. While we are making meaningful progress, we have more work ahead. We will stay focused on safety, quality and transparency, as we drive stability, improve performance, and continue to invest in our future.”