A Boeing Co. Dreamliner 787 plane with AirEuropa livery moves past the company’s final assembly facility in North Charleston, South Carolina, U.S., on Tuesday, Dec. 6, 2016.
Travis Dove | Bloomberg | Getty Images
Boeing reported a wider adjusted loss and lower revenue than analysts expected as the company faced higher costs on both commercial and defense aircraft and charges tied to the war in Ukraine.
The manufacturer said it will pause production of its 777X plane, which has not yet been certified by U.S. regulators, through 2023, a plan the company says will create $1.5 billion in abnormal costs starting in the second quarter.
Boeing also doesn’t expect deliveries of the plane to start until 2025, more than a year later than it previously forecast. Its shares were down more than 4% in in premarket trading after reporting results Wednesday morning.
Boeing has enjoyed a resurgence in demand for its 737 Max plane, which returned to service in late 2020 after two fatal crashes. But production problems and certification delays have hampered other aircraft programs.
“Through our first-quarter results, you’ll see we still have more work to do; but I remain encouraged with our trajectory, and we are on track to generate positive cash flow for 2022,” Boeing’s CEO David Calhoun said in a note to employees Wednesday. “We are a long-cycle business, and the success of our efforts will be measured over years and decades; not quarters.”
Boeing said it submitted its Dreamliner certification plan to the Federal Aviation Administration, a step toward getting regulators to sign off on resuming deliveries of the wide-body jets. Those handovers to customers has been suspended for most of the last 18 months, and buyers like American Airlines said they scaled back some international flying in response.
Here’s how Boeing performed in the first quarter compared with analysts’ estimates complied by Refinitiv:
- Adjusted results: A core loss of $2.75 a share vs. an expected loss of 27 cents a share.
- Revenue: $13.99 billion vs. $16.02 billion, expected.
The company said it’s ramping up 737 Max output to 31 a month in the second quarter. It delivered 95 planes in the first quarter up from 77 from the same period last year, but revenue in its commercial aircraft unit fell 3% from last year to $4.16 billion as 787 Dreamliner deliveries remained halted.
Boeing reported negative operating cash flow for the quarter, but still expects to be cash-flow positive in 2022.
Boeing shares are down 17% so far this year through Tuesday’s close, outpacing the S&P 500‘s 12.4% drop.
The manufacturer’s executives will hold a call with analysts at 10:30 a.m. ET.
(With inputs from CNBC)