Boeing, the American aerospace manufacturer, reported a larger quarterly loss and weaker revenue than analysts had expected. The company’s commercial airplane and defense programs continued to face challenges, resulting in a net loss of $1.44 billion for the second quarter. This is compared to a loss of $149 million during the same period last year. On an adjusted basis, Boeing reported a loss of $2.90 per share, falling short of analyst expectations by nearly $1 per share.
The decline in revenue can be attributed to various factors, including the ongoing issues with the Boeing 737 Max. The company has been working to stabilize its operations after a door plug blowout earlier this year, which led to increased scrutiny from regulators and disrupted the delivery of new aircraft to airlines. Despite these challenges, Boeing remains committed to increasing the output of its Max planes to 38 per month, although analysts note that production has been in the mid-20s per month in recent months.
Boeing’s commercial airplanes unit, which is crucial to its overall performance, reported a 32% year-over-year drop in revenue to $6 billion. The low deliveries and production rates have pushed back the company’s financial targets. In May, CFO Brian West warned that Boeing would continue to burn cash in the second quarter due to lower production and delivery rates than expected. Indeed, the manufacturer reported negative free cash flow of $4.3 billion for the second quarter.
In addition to its commercial airplane division, Boeing’s defense unit has also faced challenges. The unit reported a 2% decline in revenue for the second quarter to $6.02 billion, with a loss of $913 million during the period. This is almost double the loss incurred during the same quarter in 2023. Boeing attributed some of the losses to higher estimated engineering and manufacturing costs, as well as technical challenges.
To address these difficulties, Boeing has made changes in its leadership. It recently announced the appointment of Robert “Kelly” Ortberg, a veteran of the aerospace industry, as its next CEO. Ortberg’s experience will be crucial as the company works to regain its footing and overcome the challenges it currently faces.
Despite the setbacks, Boeing remains optimistic about its future. CEO Dave Calhoun acknowledged the challenging quarter but expressed confidence in the progress being made to strengthen the company’s quality management system and position it for success in the long term. While Boeing continues to navigate through a difficult period, it is clear that the company is taking steps to address its issues and work towards a brighter future.
