Photo provided by the NTSB on January 8, 2024 showing the location of a door that came loose on an Alaska Airlines Boeing 737 MAX 9 in Portland (NTSB/AFP/Archives/Handout)
The American aircraft manufacturer Boeing suffered a net loss in the first quarter, smaller than expected, linked to the slowdown in its deliveries after production problems and operating incidents.
“Our first quarter results reflect the immediate actions we have taken to slow down production of the 737 in order to achieve improvements in the quality” of the aircraft, commented Dave Calhoun, boss of the aircraft manufacturer, quoted Wednesday in a press release.
“We will take the time necessary to strengthen our quality and safety management systems and this work will position us for a stronger and more stable future,” added the man who is due to leave his post at the end of the year, carried away by the consequences of the many problems encountered by Boeing on several of its commercial models.
In the first quarter, Boeing’s turnover reached $16.57 billion (-7.5% year-on-year).
The net loss stood at $343 million, compared to a net loss of $414 million a year earlier. FactSet consensus analysts had forecast a much larger loss, at $709 million.
Reported per share and excluding exceptional items – data favored by the markets -, the net loss stands at $1.13, compared to a net loss of $1.27 a year earlier and a consensus of -$1.63.
“Financial results reflect lower 737 deliveries and the impact of grounding the 737-9,” Boeing said, referring to the January 5 in-flight incident involving an Alaska Airlines aircraft.
In electronic trading before the opening of the New York Stock Exchange, Boeing shares rose 4.33%.
Evolution of net profit in the 1st quarter of Boeing from 2019 to 2024 (AFP/Bertille LAGORCE, Laurence SAUBADU)
This quarterly loss is hardly a surprise, financial director Brian West having warned on March 20 that this incident – a cork holder came off the cabin in flight – would weigh down the quarterly results, in particular the operating margin of the commercial aviation division (BCA).
According to him, this should be set at -20%. It actually stands at -24.6%, compared to -9.2% a year earlier.
– Slowed production –
Regulators have identified “non-compliance” problems at Boeing and its subcontractor Spirit AeroSystems, which manufactures its fuselages in particular.
One of the consequences was the freezing by the American Civil Aviation Agency (FAA) of the production rate of the 737 at the level of the end of 2023 (38 per month), while the aircraft manufacturer intended to continue its increase until ‘to 50 copies monthly in 2025/2026.
But it only produced 27 in January and remained below the ceiling imposed “to incorporate improvements” in quality and manufacturing processes, the group said on Wednesday.
Boeing CEO Dave Calhoun on January 24, 2024 in Washington (AFP/Archives/Jim WATSON)
Consequently, over the first three months of the year, the aircraft manufacturer only returned 83 planes to their owners – including 66 copies of its flagship 737 MAX -, compared to 130 a year earlier. He therefore only collected $4.65 billion (-31%).
Mr. Calhoun, in a message to employees Wednesday, acknowledged that the company is going through “a difficult time.”
He also claims that almost the entire stock of 737s and 787s would be delivered “by the end of the year.”
This bodes well for Boeing’s coffers, which receives the bulk of payment on delivery.
At the end of October, the group’s managers indicated that 85 planes from the 737 family were waiting to be delivered to Chinese companies.
Beijing suspended all deliveries of Boeing aircraft in 2019 after two accidents in 2018 and 2019 involving 737 MAX 8s (346 deaths). They resumed at the end of December.
The Defense, Space and Security (BDS) branch earned $6.95 billion (+6%) and generated an operating profit of $151 million, compared to a loss of $212 million a year earlier.
Its results suffered from a shortfall of $222 million on contractually fixed price programs that were more expensive than expected.
© 2024 AFP
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