Boeing loses $149 million in Q2 as the plane maker is pushing ahead with production increases
Boeing flipped to a $149 million loss in the second quarter despite higher revenue, as the plane maker struggled with higher costs in both its airline and defense business.
Boeing said it is beginning to increase production of its two most popular airline planes.
The company plans to raise production of the 737 Max from 31 to 38 planes a month to take advantage of demand for newer, more fuel-efficient planes. Boeing is also boosting output of the larger, two-aisle 787 Dreamliner from four to five per month by year end.
“We have more work ahead to improve performance, but our progress is clear and we’re confident in our path forward.” CEO David Calhoun said in a memo to employees. He said the company was improving the stability of operations in its factories and among suppliers.
Boeing, headquartered in Arlington, Virginia, has been beset by supply-chain problems that continued during the second quarter, including a temporary delay in 737 deliveries because of fittings on the Max and regulators’ questions about Dreamliner inspections.
Boeing said the commercial-planes division was weighed down by “abnormal costs,” which it did not detail. Cai von Rumohr, an analyst with Cowen, said those were likely the result of fixing issues with fuel tanks on the Boeing 767 and fuselage fittings on the Dreamliner.
The defense and space business also performed worse than analysts expected. Von Rumohr called it “disappointingly still in the red,” partly due to write-downs on several programs.
The company recorded charges of $257 million related to a delay in launches of its Starliner reusable space vehicle, $189 million for higher than expected production costs for a military training jet, and $68 million for delays in a defense refueling drone.
Boeing’s loss compared with net income of $160 million a year earlier and, excluding unusual items, amounted to 82 cents per share. Analysts expected a loss of 89 cents per share, according to a FactSet survey.
Revenue rose 18% to $19.75 billion, more than the $18.59 billion that analysts expected. Sales were boosted by an increase in delivery of commercial planes to airlines and lessors.
Shares of The Boeing Co. rose 3% before Wednesday’s opening bell.