Boeing’s recent 737 MAX-9 is pictured under construction at their production facility in Renton, Washington, Feb. 13, 2017.
Jason Redmond | Reuters
Boeing said Wednesday it’s going to deliver fewer 737 Max aircraft than it previously expected this 12 months as it really works through production flaws detected on a few of the bestselling aircraft.
The corporate expects at hand over between 375 and 400 of its workhorse plane this 12 months, down from a previous estimate of 400 to 450, which Boeing’s CFO reaffirmed during a conference last month. It marks a headwind for Boeing and for airline customers desirous to receive recent, more fuel-efficient jetliners.
Boeing maintained its expectations for 2023 free money flow of $3 billion to $5 billion, despite the production problems. The corporate’s shares rose greater than 3% in premarket trading after Boeing reported results.
“I actually have heard those outside our company wondering if we have lost a step. I view it as quite the other,” CEO Dave Calhoun said in an worker note Wednesday, as the corporate reported third-quarter results. “Most significantly, we have worked hard to instill a culture of speaking up and transparently bringing forward any issue, regardless of the dimensions, so we are able to get things right for the longer term.”
He said the corporate now can fix those issues “once and for all.”
Boeing has been working to extend output of latest planes to satisfy demand for a recovery in air travel after the Covid pandemic. Budget carrier Ryanair, for one, recently cut its winter schedule, blaming delivery delays from Boeing.
Sales within the manufacturer’s industrial aircraft unit rose 25% to $7.88 billion from the third quarter of 2022, boosted by deliveries of wide-body 787 Dreamliner planes, though lower 737 deliveries and abnormal production costs led to a negative operating margin of 8.6%.
Boeing said it plans to ramp up output of the 737 to 38 planes monthly by 12 months’s end and said it’s transitioning to Dreamliner production of 5 monthly. It reaffirmed its estimate at hand over 70 to 80 Dreamliners this 12 months.
Its defense unit was also losing money partly from a $482 million loss on its Air Force One program due to “higher estimated manufacturing cost related to engineering changes and labor instability,” in addition to a $315 million loss on a satellite contract.
Here’s how the corporate performed throughout the period ended Sept. 30, compared with estimates from LSEG, formerly referred to as Refinitiv:
- Adjusted loss per share:Â $3.26 vs. $2.96
- Revenue:Â $18.10 billion vs. $18.01 billion
Boeing’s net loss narrowed to almost $1.64 billion, or $2.70 a share, for the third quarter compared with the year-earlier period when it had a lack of $3.31 billion, or $5.49 a share. Adjusting for one-time items, mostly related to pension plans, the corporate lost $3.26 per share, a wider-than-expected adjusted loss.
Revenue rose 13% from the identical three-month period a 12 months ago to $18.10 billion, barely ahead of analysts’ estimates.
Boeing will hold a call with analysts at 10:30 a.m. ET when executives will face questions on its production pace, demand and the way it expects to enhance margins in its defense unit.
Don’t miss these CNBC PRO stories:
