Boeing Co. aircraft Dreamliner 787 with AirEuropa livery passes the company’s final assembly plant in North Charleston, South Carolina, USA, on Tuesday, December 6, 2016.
Travis Dove Bloomberg | Getty Images
Boeing reported wider adjusted losses and lower revenues than analysts had expected, as the company faced higher costs for both commercial and defense aircraft and fees related to the war in Ukraine.
The manufacturer said it would suspend production of its 777X, which is not yet certified by US regulators, by 2023, a plan that would set the company an unusual $ 1.5 billion in spending starting in the second quarter.
Boeing also does not expect deliveries of the aircraft to begin by 2025, more than a year later than forecast. Its shares fell more than 4% in pre-market trading after reporting results on Wednesday morning.
Boeing is looking forward to a resurgence of demand for its 737 Max, which returned to service in late 2020 after two fatal crashes. But production problems and delays in certification have hampered other aircraft programs.
“Through our results for the first quarter, you will see that we still have work to do; but I remain encouraged by our trajectory and we are on track to generate positive cash flow for 2022, ”Boeing CEO David Calhoun told employees in a note on Wednesday. “We are a long-running business and the success of our efforts will be measured in years and decades, not quarters.”
Boeing said it had presented its Dreamliner certification plan to the Federal Aviation Administration, a step towards getting regulators to sign a resumption of broad-body aircraft deliveries. These customer transfers have been suspended for most of the past 18 months, and buyers such as American Airlines have said they have reduced some international flights in response.
Here’s how Boeing performed in the first quarter compared to analysts’ estimates by Refinitiv:
- Adjusted results: Basic loss of $ 2.75 per share compared to an expected loss of 27 cents per share.
- Revenue: $ 13.99 billion versus expected $ 16.02 billion.
The company said it was increasing production of the 737 Max to 31 per month in the second quarter. Delivered 95 aircraft in the first quarter compared to 77 compared to the same period last year, but revenue in the commercial aircraft division fell 3% from last year to $ 4.16 billion as 787 Dreamliner shipments remained suspended.
Boeing reported negative operating cash flow for the quarter, but still expects cash flow to be positive in 2022.
Shares of Boeing have fallen 17% so far this year until closing on Tuesday, ahead of the 12.4% drop in the S&P 500.
The manufacturer’s executives will talk to analysts at 10:30 a.m. ET.
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