Boeing’s new 737 MAX-9 is under construction at their manufacturing facility in Renton, Washington, U.S., on February 13, 2017.
Boeing said on Wednesday it will deliver fewer 737 Max planes this year than expected as it works through manufacturing defects found in some of its best-selling planes.
The company expects to deliver between 375 and 400 of its workhorse planes this year, up from an earlier estimate of 400 to 450, which Boeing’s CFO reaffirmed during a conference call last month. That represents a headwind for Boeing and airline customers eager to get new, more fuel-efficient jetliners.
Despite the production issues, Boeing maintained expectations for free cash flow of $3 billion to $5 billion in 2023. The company’s shares rose more than 3% in premarket trading after the Boeing report.
“I’ve heard people outside our company wonder if we’ve lost a step. I see it as quite the opposite,” CEO Dave Calhoun said in a staff memo Wednesday, as the company reported third-quarter results. “Most importantly, we’ve worked hard to create a culture of talking openly and openly about any issue, no matter the size of the issue, so we can get things right for the future.”
The company can now fix those problems “once and for all,” he said.
Boeing is working to ramp up production of new planes to meet demand for the recovery of air travel after the Covid pandemic. Budget carrier Ryanair recently cut its winter schedule, Accusing Delivery delay from Boeing.
Sales at the manufacturer’s commercial aircraft division rose 25% to $7.88 billion from the third quarter of 2022, boosted by deliveries of the wide-body 787 Dreamliner, although lower 737 deliveries and unusual production costs led to a negative operating margin of 8.6%.
Boeing said it plans to increase production of the 737 to 38 planes per month by the end of the year, and to shift Dreamliner production to five per month. It reaffirmed its estimate of delivering 70 to 80 Dreamliners this year.
Its defense division lost part of its $482 million loss on its Air Force One program because of “overestimated production costs related to engineering changes and labor instability” and a $315 million loss on a satellite contract.
Here’s how the company fared The period ended on September 30Compared to ratings from LSEG, formerly Refinitiv:
- Adjusted loss per share: $3.26 vs. $2.96
- Revenue: $18.10 billion vs. $18.01 billion
Boeing’s net loss narrowed to nearly $1.64 billion, or $2.70 a share, compared with a loss of $3.31 billion, or $5.49 a share, in the third quarter a year earlier. Adjusting for one-time items mostly related to pension plans, the company lost $3.26 per share, a wider-than-expected adjusted loss.
Revenue rose 13% to $18.10 billion from the same three-month period a year ago, slightly ahead of analysts’ estimates.
Boeing will hold a call with analysts at 10:30 am ET. Executives will then face questions about its production pace, demand and how it expects to improve margins in its defense division.
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