Boeing said Wednesday that it lost $1.2 billion in the first quarter as it and took large write-downs and lost money in both its civilian-airplane and defense businesses.
The loss was bigger than Wall Street had forecast, and the company's quarterly revenue also fell short of expectations. Boeing burned through $3.2 billion in cash.
“Messier quarter than any of us would have liked," CEO David Calhoun acknowledged on CNBC.
Shares of Boeing Co., based in Chicago, fell 10% shortly after the opening bell Wednesday.
Boeing offered some optimism for improvement, however, saying that it has submitted plans to resume deliveries of its 787 airliner and it increased production and deliveries of the 737 Max passenger jet during the quarter.
Calhoun said the company was on track to generate positive cash flow over the entire year "despite the pressures on our defense and commercial development programs.”
The quarterly report brought disappointing news for Boeing shareholders on several fronts.
The company again pushed back the expected first delivery of a new version of its long-range, twin-aisle 777 passenger jet by at least a year until 2025. The move was widely expected, as Boeing adapts to certification standards that have been tightened since regulators approved the Max, then were forced to ground the planes after two deadly crashes.
The delay in expected approval for the 777-9 caused Boeing to forecast $1.5 billion in “abnormal” production costs.
Boeing took a $660 million charge for its program to build new presidential Air Force One jets, which it blamed on higher supplier costs, final technical requirements and schedule delays. It also took $367 million in charges on a military training jet.
Boeing said it submitted plans to the Federal Aviation Administration to resume deliveries of the 787 passenger jet. Those deliveries have been halted for more than a year by production issues that Boeing previously said would add about $2 billion in costs, of which $312 million was recorded in the first quarter.
Airlines are expecting a boom summer, with travelers returning in huge numbers after two years of pandemic. But some of them, like American, have trimmed summer schedules because they haven't received the Boeing 787s that they ordered years ago.
“They have a busy summer schedule. We have already disappointed them with respect to the capacity on that summer schedule," Calhoun said. Just when Boeing will be cleared to resume deliveries of 787s is up to the FAA, but Calhoun said “We will be back in the air sooner rather than later.”
Boeing expects to boost production of the 737 Max to 31 planes a month in the current quarter, which runs through June. That plane was grounded worldwide for nearly two years after two deadly crashes.
And Boeing took $212 million in pretax charges related to Russia’s invasion of Ukraine. The company did not immediately explain the write-down.
In a memo to employees, Calhoun said Boeing is taking steps to improve long-term performance.
“We are a long-cycle business, and the success of our efforts will be measured over years and decades, not quarters,” he said.
Boeing's commercial-airplanes division lost $859 billion, hobbled by the inability to deliver 787 jets while Boeing tries to fix production flaws on the twin-aisle plane.
The defense business, long a bulwark against volatility in aircraft sales to airlines, lost $929 million as revenue fell 24%.
The company reported a loss attributable to shareholders of $1.22 billion, compared with a loss of $537 million a year earlier. The “core” loss was $2.75 a share on revenue of $13.99 billion. Analysts expected a loss of 25 cents per share on revenue of $16.02 billion, according to a FactSet survey.
John Petrides, Portfolio Manager at Tocqueville Asset Management, joins Cheddar News' Closing Bell, where he breaks down Monday's market activity amid the emergence of the omicron variant, and what it could mean for the Fed's timeline when it comes to raising rates and tapering pandemic aid.
Amid continued volatility due to COVID-19, high inflation, and changing consumer and business behavior, what are investors thinking as we close out the fourth quarter and look ahead to 2022? Hady Farag, Partner and Associate Director at Boston Consulting Group, joins Cheddar News' Closing Bell to discuss what investors are prioritizing, what risks they are watching out for, and more.
Don Basile, CEO, Monsoon Blockchain & Founder of Bitcoin Latinum, joins Cheddar News' Closing Bell, where he explains why we're seeing major crypto investors look to purchase expensive pieces of art, and discusses what the NFT space could look like in the not-too-distant future.
Jack Constantine, chief digital officer and product inventor at Lush, joined Cheddar to talk about the cosmetic company's mass exodus from major social media platforms TikTok, Facebook, Instagram, and Snapchat, in the wake of recent reports that Instagram specifically had negative impacts on teen girls. He noted that with teenage girls being a large part of its consumer base and audience, Lush had a responsibility to market its company on outlets that prioritize mental wellbeing. "For us, we've always been a social brand, and it started to feel that social media was no longer offering what we felt we wanted to gain from it," he said. "And then obviously when you add that to the damage that it's causing, it just feels like a combination that we can't continue on with." The company also pulled out of social media platforms in 2019.
Jon Lowen, Co-Founder of Surfside, joined Wake Up With Cheddar's Baker Machado to discuss Uber's partnership with cannabis retailer Tokyo Smoke, as it's the first time a cannabis merchant has been listed on UberEats across all of its global markets.
Financial Expert Jessica Weaver joined Cheddar's Jill Wagner to discuss some money-saving tips for Americans as inflation and supply chain issues herald the most expensive Thanksgiving meal yet.
Jack Dorsey resigned from his post as CEO of the social media company on Monday and will be replaced by chief technology officer Parag Agrawal. Mitch Rubin, portfolio manager at RiverPark Long/Short Opportunity Fund, joined Cheddar to break down the move and what it means for investors in both Twitter and Square, the payment company that Dorsey also helms. "For the long-term, I think this is very positive news for both companies," he said. Rubin also talked about growing competition in the social media space and why Twitter continues to lag behind other major players.
Friday saw big sell offs, with the Dow Jones posting its worst day since October 2020, falling 905 points, with the Nasdaq and S&P 500 each tumbling more than two percent as well. Much of that due to investor concerns over the new Covid-19 'Omicron' variant first detected in South Africa. Craig Erlam, senior market analyst at Oanda explains what investors should expect this week.
Earlier in the week, we saw President Biden nominate Jerome Powell to serve as Fed chair for another four-year term in the midst of the country’s struggles with covid, inflation, and supply unrest. Claudia Sahm, senior fellow at the Jain Family Institute and former Federal Reserve and White House economist explains why the markets saw a boost following the nomination.
Despite concerns over inflation, worker shortages, and global supply chain issues, retailers saw a surge in shoppers in October. Major retailers have also reported strong quarterly earnings ahead of the holiday shopping season as businesses have continued to bounce back from pandemic sale slumps. David Swartz, Consumer Equity Research analyst at Morningstar Research Services explains why consumers are still flocking to stores despite a rise in some prices.
