BoeingBoeing Co. said that its work on replacing the Air Force One commercial jets is behind schedule, taking another charge on the loss-making program that has added to the financial pressures from the stuttering recovery of its presidential airliner business.
The aerospace giant is contracted to deliver two converted 747 - 8 jumbo jets by the end of 2024, but has been forced to switch suppliers for some of the interior work on the aircrafts. It took a $318 million first tax charge on the project in the second quarter, the latest quarter in a year and the latest drag from a defense unit that it is relying on to get it through to a recovery in commercial airline traffic.
The limited resumption of the 737 MAX and 787 Dreamliner jet deliveries against a background of quality issues saw sales of $15.2 billion in the first quarter, down 10% from a year earlier. Boeing reported a loss of $561 million compared to a loss of $641 million a year earlier.
Boeing has been grappling with commercial-airline production issues for the last months. It halted 787 deliveries for five months to fix manufacturing problems. Earlier this month, it told airlines to ground 106 MAX jets to resolve electrical issues stemming from a change in its assembly process.
The company said the recovery of air travel demand was uneven but was gaining momentum. As the sales of new aircraft increased burgeoning with the rise of Covid-19 vaccinations, the company has said a U.S. trade deal with China would boost orders for new aircraft.
What challenges remain and we will continue to monitor the global trade environment as well as the Covid-19 Trends around the globe, said Chief Executive David Calhoun in a Wednesday message to the staff.
The 98 cent per share loss in the quarter ended March 31 was just ahead of the Percent consensus among analysts polled by FactSet. The company burned out about $3.4 billion of cash in the quarter.
Boeing Shares were 1% down in the premarket trading table.