Grounding of 737 MAX: Boeing posts 2.94bn loss for Q2
Boeing has announced a net loss of USD$2.94 billion on 737 MAX for the second quarter, as the financial report indicates that charges on the controversial 737 MAX almost pushed the company’s margins into the red.
This is the biggest quarterly loss the company has ever reported, considering the swing from a $2.2 billion profit in the year before, TW has gathered.
The Chicago-based company announced last week that it would take a $4.9 billion second-quarter after-tax charge on the estimated disruptions caused by the grounding of the 737 MAX.
Revenue for the quarter fell to $15.75 billion, down from last year’s $24.26 billion, reflecting the MAX charge and lower 737 deliveries.
The negative operating cash flow of $590 million was also a swing from the positive $4.68 billion recorded in last year’s quarter.
Boeing said it is working closely with the FAA on the process to certify the 737 MAX software update and return the aircraft to service. But due to the uncertainty of the MAX’s return, the airframer said it will not issue new financial guidance until a future date.
On the timing of the 737 MAX’s re-certification, Boeing said development and testing are underway, with a final software package to be submitted to the FAA once all requirements have been satisfied.
Regulatory authorities will then determine the process for certifying the MAX software and training updates, and the timing for lifting the grounding order.
“This is a defining moment for Boeing and we remain focused on our enduring values of safety, quality, and integrity in all that we do, as we work to safely return the 737 MAX to service,” Boeing CEO Dennis Muilenburg said.
The Commercial Aircraft division delivered 90 aircraft during the second quarter, down from 194 in 2Q18.
Of the total, just 24 were 737s, with no MAX deliveries due to the grounding. Total 737 deliveries in the second quarter last year were 137.
Other commercial aircraft deliveries in the quarter were two 747s, ten 767s, twelve 777s, and forty-two 787s.
Culled from Airwise.
