Boeing Quarterly Results Hurt By Hefty 737 MAX Grounding Charge

by Ike Obudulu Posted on July 24th, 2019

Boeing Co. (BA) reported Wednesday a huge loss for the second quarter, hurt by a hefty charge and increased costs related to the 737 MAX grounding and associated delivery delays. Both core loss and revenues missed analysts’ estimates by a big margin.

The aircraft maker said a new guidance will be issued at a future date as the prior guidance does not reflect 737 MAX impacts.

For the second quarter, the company reported a net loss of $2.94 billion or $5.21 per share, compared to net income of $2.20 billion or $3.73 per share in the year-ago quarter.

Excluding special items, core loss for the quarter was $3.75 billion or $5.82 per share, compared to core earnings of $2.39 billion or $3.33 per share in the prior-year quarter.

Revenues for the quarter declined 35 percent to $15.76 billion from $24.26 billion in the same quarter last year, reflecting 737 MAX impacts, more than offsetting higher defense and services volume.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $1.87 per share on revenues of $18.55 billion for the quarter. Analysts’ estimates typically exclude special items.

Boeing said the results were impacted by the previously announced 737 MAX charge, which reduced revenue by $5.6 billion and earnings by $8.74 per share, as well as lower 737 deliveries partially offset by higher defense and services volume.

Boeing is currently working very closely with the FAA on the process they have laid out to certify the 737 MAX software update and safely return the MAX back in to service.

Boeing is working very closely with the FAA on the process they have laid out to certify the 737 MAX software update and safely return the MAX to service. It also continues to engage global regulators and customers on safe return to service of the 737 MAX.

Total company backlog at quarter-end remained healthy at $474 billion and included net orders of $9 billion. Commercial Airplanes backlog remains healthy with more than 5,500 airplanes valued at $390 billion.

During the quarter, Commercial Airplanes delivered 90 airplanes, including 42 787s, and captured orders for two 777 freighters for DHL and six 767 freighters for FedEx. This is compared to 194 deliveries in the year-ago quarter.

The company said the previously issued 2019 financial guidance does not reflect 737 MAX impacts. Due to the uncertainty of the timing and conditions surrounding return to service of the 737 MAX fleet, new guidance will be issued at a future date.

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