Boeing eked out a small adjusted profit in the third quarter, helped by a ramp-up in deliveries of its once bestselling 737 Max jets amid a rebound in global air travel. But the company booked charges on its problem-plagued 787 and Starliner spacecraft programmes.
The company burned through just $507 million (€437 million) in cash for the third quarter, far less than the $1.87 billion that Wall Street expected, as it stepped up 737 Max jetliner deliveries and booked a one-time tax benefit.
That was the good news. The company’s adjusted loss of 60 US cents a share and revenue of $15.3 billion both missed the average of analysts’ estimates.
The 737 Max and 787 Dreamliner aircraft are integral to the US planemaker's ability to recoup billions of dollars in lost sales from the pandemic and move beyond the safety scandal caused by two fatal crashes.
On the 787 widebody programme, Boeing said it incurred abnormal costs of roughly $1 billion – or $183 million in the quarter – due to inspections and repairs from structural defects embedded in the jets over the last two years, confirming for the first time a price tag first reported by Reuters in February.
Quality
Restarting Dreamliner deliveries that have been halted for months is key to Boeing’s financial turnaround. But the planemaker must first address quality defects and win regulatory approval.
Douglas Harned, an analyst at Sanford C Bernstein, estimated before Boeing's release that the company has about $9 billion in cash tied up in Dreamliners parked around its factories and in desert storage lots.
Boeing also booked a charge of $185 million on its long-delayed Starliner astronaut capsule it is developing under Nasa’s commercial crew programme, due to delays and repairs from stuck fuel valves that sidelined the spacecraft after its last flight attempt.
The company reported a core operating profit of $59 million in the quarter, compared with a loss of $754 million a year earlier.
Boeing said it was currently building 19 737 Max jets per month, up from the 16 last quarter. It also said it has been producing about two jets monthly at its South Carolina factory with plans to go back to an already slow rate of five a month at some future point. – Reuters/Bloomberg
