New York (AFP) – Boeing on Wednesday reported a third-quarter loss of $5.4 billion as massive added costs from the delayed certification of its 777X aircraft weighed down its results. The aviation giant scored a 30-percent jump in revenues to $23.3 billion following much higher commercial plane deliveries compared with the year-ago level. However, the performance was marred by a one-time charge of $4.9 billion on the repeatedly delayed 777X program, which has faced a prolonged certification process with US authorities. Boeing had hoped to begin the next phase of certification flights this year, but the company has pushed those back until 2027 to complete needed preparatory analysis, according to company officials.
Chief Executive Kelly Ortberg pointed to the October approval by the Federal Aviation Administration of an increased monthly production rate on the 737 MAX as a sign of the company’s progress. He also noted that Boeing generated positive free cash flow during the quarter, a benchmark closely watched by Wall Street. However, Ortberg stated that more work was still needed to turn Boeing around after a series of safety problems, including two fatal 737 MAX crashes in 2018 and 2019 that have led to more intense FAA scrutiny over new plane certifications. “While we are disappointed in the 777X schedule delay, the airplane continues to perform well in flight testing, and we remain focused on the work ahead,” Ortberg said.
Wednesday’s results marked the 17th straight quarterly loss for Boeing, according to Briefing.com, which characterized the figures as “a mix of clear progress and lingering challenges.” Boeing must “prove that its turn-around efforts can translate into consistent profitability,” Briefing.com noted. Meanwhile, European rival Airbus reported a 14 percent jump in profits to $1.1 billion, its latest strong financial result that underscored the wide gulf between the companies in recent years. However, in one bright spot for Boeing, the US company has retaken the lead in terms of orders in 2025 as it benefits from the aggressive trade lobbying of US President Donald Trump. Boeing had racked up 774 net orders as of the end of September, compared to 514 for Airbus. Last year, Airbus was far ahead with 648 compared to 272 for Boeing.
Boeing has repeatedly pushed back the timeframe on the 777X. Under the latest shift, commercial deliveries will commence in 2027, delayed from the prior 2026 timeframe. After beginning deliveries, company officials expect the program to operate as a drain on cash in the first couple of years as production ramps up, but to turn cash flow positive in 2029, Chief Financial Officer Jay Malave said on a conference call. In 2020, Boeing booked a $6.5 billion charge on the 777X, citing the lengthy FAA certification process as a major factor. Ortberg, in a conference call with financial analysts, described the shifting backward of the 777X tests as the result of new requirements that the FAA and Boeing are both working through.
In a message to employees, Ortberg said the company’s defense operation in St. Louis is “effectively executing our strike contingency plans” following the vote Sunday by more than 3,000 workers to reject the company’s latest contract offer. Ortberg mentioned on the conference call that production in the striking operation is operating at “about the same” rate as prior to the stoppage. Local Boeing officials in St. Louis have stated that the company is accelerating recruitment of replacement workers and welcoming back employees who cross the picket line. Union leaders have criticized Boeing for refusing to negotiate in good faith and have described the hiring of replacement workers as risky. “These are complex, precision-built products — and they cannot replace the skilled, experienced IAM members who have dedicated their careers to this work,” stated a Tuesday message from the International Association of Machinists and Aerospace Workers District 837. Shares of Boeing closed down 4.4 percent.
© 2024 AFP
