ollowing the release of Boeing’s Q3 2022 earnings report;

Harry Boneham, Aerospace Analyst at GlobalData, a leading data and analytics company, offers his view:

“In the third quarter of 2022, Boeing’s Defense, Space & Security business unit revenue has decreased to $5.3 billion, a decline of almost 20% in comparison to Q3 2021. Whilst losses can to a certain degree be attributed to supply chain difficulties, challenging macroeconomic conditions and inflation linked to Russia’s war in Ukraine, Boeing could take responsibility for some of the challenges that they have faced.

“Boeing reports that the KC-46A, VC-25B, MQ-25, T-7A, and Commercial Crew programs have been hampered by technical challenges and supply chain costs as well as higher-than-estimated manufacturing costs, resulting in $2.8 billion losses. This loss is sizeable, especially in stark contrast to the $436 million profit made in Q3 2021. Specifically, the KC-46, accumulated a total of $5.4 billion in charges by the end of 2021, a financial burden Boeing must bear due to it being a fixed-price contract.

“However, the good news for Boeing is that the company’s defense offerings are competitive and continue to attract international and domestic orders which will allow the unit to recover from the current headwinds. For instance, in September 2022 Poland confirmed that it would procure 96 AH-64E from Boeing, an order which GlobalData forecasts could amount to approximately $11 billion between 2022-2032. Additionally, whilst the number of F-15EX ordered by the US Air Force may be cut from the 144 originally stated, it is likely that deliveries will ramp up in the coming years. In FY2023, the USAF has budgeted $2.77 billion to procure 24 platforms.”