Despite the setbacks, Boeing recorded smaller losses than expected

US planemaker Boeing posted a smaller-than-expected net loss in the first quarter, hit by slower deliveries following production problems and operational incidents.

“Our first-quarter results reflect the immediate actions we took to slow 737 production to achieve quality improvements” on the planes, commented Dave Calhoun, an executive at the plane maker, as quoted in a press release Wednesday.

“We will take the time necessary to strengthen our quality and safety management systems, and this work will provide us with a stronger and more stable future,” added the man, who is due to leave his post at the end of the year, fascinated by the fallout from the many problems Boeing faces at several of its commercial models.

Less loss than expected

In the first quarter, Boeing’s turnover reached $16.57 billion (-7.5% year on year). The net loss was $343 million, compared with a net loss of $414 million a year earlier. FactSet analysts had forecast a much larger loss of $709 million.

Net loss reported per share, excluding exceptional items, a data approved by markets, was $1.13, compared with a net loss of $1.27 a year earlier and the consensus estimate of $1.63.

“The financial results reflect the decline in Boeing 737 deliveries and the impact of the grounding of the Boeing 737-9,” Boeing said, referring to the Jan. 5 incident involving an Alaska Airlines aircraft.

In electronic trading before the opening of the New York Stock Exchange, Boeing shares rose 4.33%.

The quarterly loss is hardly a surprise, as Chief Financial Officer Brian West warned on March 20 that the incident, in which a plug holder came loose from the cockpit mid-flight, would drag down quarterly results, particularly the commercial aviation division’s operating margin. According to him, this should be -20%. In fact, it is -24.6% compared to -9.2% a year earlier.

Slow production

Regulators have identified problems of “non-compliance” at Boeing and its subcontractor Spirit AeroSystems, which, among other things, produces the company’s fuselages.

One of the consequences was the FAA freezing the 737 production rate at the level of the end of 2023 (38 per month), while the aircraft manufacturer intended to continue increasing it to “50”. copies monthly in 2025-2026.

But the company produced only 27 units in January and remained below the ceiling set “to improve” quality and production processes, the group said on Wednesday.

So in the first three months of the year, the planemaker returned just 83 planes to owners, including 66 examples of its flagship 737 MAX, down from 130 a year earlier. Thus, it collected only $4.65 billion (-31%).

Dave Calhoun acknowledged in a message to employees Wednesday that the company is going through “challenging times.” He also claims that almost the entire fleet of Boeing 737s and 787s will be delivered “by the end of the year.”

That bodes well for Boeing’s coffers, which receive most of the payment on delivery.

At the end of October, group managers reported that 85 737 family aircraft were awaiting delivery to Chinese companies. Beijing suspended all Boeing aircraft deliveries in 2019 following two crashes in 2018 and 2019 involving 737 MAX 8 aircraft (346 fatalities). They resumed at the end of December.

The Defense, Space and Security (BDS) division earned $6.95 billion (+6%) and posted an operating profit of $151 million, compared with a loss of $212 million a year earlier. Its results were hurt by a $222 million shortfall in contracted fixed-price programs that turned out to be more costly than expected.