Boeing’s new 737 MAX 9 aircraft is under construction at its production facility in Renton, Washington, US, February 22, 2019. 13, 2017.
Jason Redmond – Reuters
Boeing It said Wednesday it will deliver fewer 737 MAX planes than it previously expected this year as it works to resolve production flaws discovered in some of its best-selling planes.
The company expects to deliver between 375 to 400 of its operational aircraft this year, down from the previous estimate of 400 to 450, which was confirmed by Boeing’s chief financial officer during a conference last month. That represents a headwind for Boeing and for airline customers eager for new, more fuel-efficient planes.
Boeing maintained its 2023 free cash flow forecast of between $3 billion and $5 billion, despite production problems. Shares rose more than 3% in premarket trading after Boeing reported results.
“I’ve heard those outside our company wondering if we’ve missed a step. I see it as quite the opposite,” CEO Dave Calhoun said in a memo to employees on Wednesday, when the company reported third-quarter results. “Most importantly, we have worked hard to instill a culture of speaking up and raising any issue transparently, no matter the size, so that we can make things right in the future.”
He said the company can now fix these issues “once and for all.”
Boeing is working to increase production of new aircraft to meet demand for the post-pandemic air travel recovery. Budget carrier RyanairFor example, it recently reduced its winter schedule, blaming Delivery delay from Boeing.
Sales at the manufacturer’s commercial aircraft unit rose 25% to $7.88 billion compared to the third quarter of 2022, supported by deliveries of 787 Dreamliner widebody aircraft, although lower 737 deliveries and abnormal production costs led to a negative operating margin of 8.6%.
Boeing said it plans to increase 737 production to 38 planes per month by the end of the year, and said it is moving to producing Dreamliners with five planes per month. It reiterated its estimate of delivering between 70 to 80 Dreamliner aircraft this year.
Its defense unit was also losing money in part from a $482 million loss on its presidential jet program due to “higher estimated manufacturing costs associated with engineering changes and labor instability,” as well as a $315 million loss on a satellite contract.
Here’s how the company performed over the course of Period ending September 30Compared to estimates from LSEG, formerly known as Refinitiv:
- Adjusted loss per share: $3.26 vs $3.26 $2.96
- he won: $18.10 billion vs. $18.10 billion $18.01 billion
Boeing’s net loss narrowed to nearly $1.64 billion, or $2.70 per share, in the third quarter compared to the same period a year earlier when it lost $3.31 billion, or $5.49 per share. After adjusting for one-time items, mostly related to retirement plans, the company lost $3.26 per share, an adjusted loss larger than expected.
Revenues rose 13% compared to the same period last year to $18.10 billion, slightly above analyst estimates.
Boeing will hold a call with analysts at 10:30 a.m. ET where executives will face questions about the pace of its production and demand and how it expects to improve margins at its defense unit.
This is breaking news. Check back for updates.
