Boeing lost nearly $3 billion in the 2nd quarter as its 737 Max crisis drags on
- Boeing on Wednesday reported second quarter earnings that were heavily impacted by the company's grounded 737 Max jet, which remains grounded following two deadly crashes.
- The Washington-based planemaker said it lost nearly $3 billion in the three month period ending June 31.
- The company plans to issue new 2019 guidance at a later date, it said.
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Boeing reported a nearly $3 billion loss for the second quarter on Wednesday, as it factored in a previously announced $5 billion charge related to the prolonged grounding of its best-selling 737 Max jet, sending its shares sharply lower.
The U.S. planemaker said it would issue a new 2019 outlook at a future date, as the current forecast, which was suspended in April following two deadly crashes involving the Max, does not reflect the recent charges.
"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," Dennis Muilenburg, Boeing's CEO, said in a press release. "During these challenging times, teams across our enterprise continue to perform at a high level while delivering on commitments and capturing new opportunities driven by strong, long-term fundamentals."
Investors on a conference call later on Wednesday morning will be eager for information on how Boeing plans to increase production, repair its image with the flying public and stem its loses, as well as more details on General Electric Co engine delays on the 777X widebody program.
Boeing said its first flight of the 777X is now delayed until early 2020 due to the engine problems announced last month, while its current plan for a first delivery to customers in late 2020 faced significant risk.
Initially, the 777-9 was scheduled for a first flight in the fourth quarter of 2018 with delivery to the first customer in the second quarter of 2020, according to a Boeing certification plan seen by Reuters.
The grounding of the 737 Max has sent shockwaves through the industry and also pushed back the launch of a new Boeingaircraft, a twin-aisle jet for the middle of the market. That jetliner, known as NMA, is not just a crucial piece in Boeing's fight with archrival Airbus in the lucrative longer-haul market but also for the eventual development of a 737 replacement, industry sources have said.
The company said it would issue a new 2019 outlook at a future date, as the current forecast, which was suspended in April following the two deadly crashes, does not reflect the recent charges.
Boeing said its net loss for the quarter ended June 30 was $2.94 billion, compared with a profit of $2.20 billion, a year earlier.
Shares of Boeing slid about 0.8% in early trading following the earnings report. The stock is down about 15% since the 737 Max jet was grounded in March. That decline -- and resulting affects on airlines which rely on the passenger jet - is estimated to be so impactful that it could drag down the entire United States GDP for the second quarter, JPMorgan analysts said.
Reporting by Ankit Ajmera in Bengaluru; Editing by Saumyadeb Chakrabarty