Boeing (NYSE:BA) faced a challenging third quarter, recording a $1.64 billion loss. Several factors contributed to this setback, including decreased deliveries of its popular planes and higher expenses related to the production of two new Air Force One presidential jets.
Boeing had to revise its 737 Max production forecast, scaling it back to between 375 and 400 planes for the year, down from the initial estimate of 400 to 450. This adjustment was made due to the need for inspections and additional work to rectify issues with the pressure-sealing section of the planes. Boeing, in collaboration with Spirit AeroSystems, is addressing problems with improperly drilled rivet holes in the fuselage.
The company reported a $482 million loss in the quarter, associated with a contract with the Air Force for the construction of two presidential jets. This loss was attributed to higher-than-expected manufacturing costs. Additionally, Boeing incurred a $315 million loss on a satellite contract.
Excluding these exceptional expenses, Boeing’s loss amounted to $3.26 per share in the quarter. On the bright side, revenue increased by 13% to reach $18.10 billion.
Analysts had anticipated a loss of $3.18 per share on revenue of $18.01 billion, according to a FactSet analyst survey.
Despite the challenges, analysts believed that the reaction from investors would be relatively subdued, as the issues with 737 deliveries were already known. Boeing’s third-quarter deliveries included 105 commercial planes, compared to 112 the previous year. Deliveries of 737s fell to 70 from 88 in the same period last year, although deliveries of 787 Dreamliners saw an increase.
CEO David Calhoun expressed confidence that the company would still meet its long-term financial objectives. He highlighted the ongoing demand for Boeing aircraft and emphasized the need for the company to perform effectively. Boeing’s shares rose by approximately 3% in premarket trading.
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