On Wednesday, Boeing announced a significant financial loss for the third quarter, primarily attributed to a reduction in deliveries of its best-selling plane, the 737. The company reported a loss of $1.64 billion for the quarter ending on September 30, and also lowered its delivery forecast for the 737 for the year due to quality issues with its supplier, Spirit AeroSystems.
Despite the loss, Boeing’s third-quarter revenue reached $18.1 billion, slightly surpassing analysts’ expectations of $18.0 billion. However, the ongoing challenges with the 737 program continue to impact the company’s financial performance.
Boeing revealed that production and deliveries of its 737 planes will be slowed down as the company conducts inspections and additional work to address a pressure-sealing section issue on these aircraft. This issue stems from problems with rivet holes in the fuselage, which Boeing and its supplier, Spirit AeroSystems, are actively working to rectify.
Furthermore, Boeing’s financial results for the third quarter included a $482 million loss related to a contract with the U.S. Air Force for building two new presidential jets. This loss was incurred due to higher manufacturing costs. Additionally, the company faced a $315 million loss on a satellite contract during the same period.
In the third quarter, Boeing delivered 105 commercial planes, a decrease from the 112 planes delivered during the same period in the previous year. The reduction in deliveries can be attributed to ongoing production issues that have affected the 737 Max, one of Boeing’s key passenger planes.
Specifically, 737 deliveries dropped from 88 to 70 during the third quarter compared to the previous year, while deliveries of Boeing’s 787 Dreamliners increased. The supply chain challenges and quality issues at Spirit AeroSystems have played a substantial role in these delivery setbacks.
Despite these hurdles, Boeing’s CEO, David Calhoun, expressed confidence in the company’s long-term prospects. Calhoun noted that demand for Boeing aircraft remains strong and is expected to support the company’s recovery. He emphasized the importance of meeting performance goals and stabilizing the supply chain to increase aircraft production rates.
In a message to Boeing employees, Calhoun stated, “I have heard those outside our company wondering if we’ve lost a step. I view it as quite the opposite.” He expressed his belief that Boeing would continue to thrive by delivering quality aircraft to meet the needs of its customers.
While Boeing initially aimed to deliver between 400 and 450 737 jets in 2023, it was forced to revise its target to 375 to 400 jets due to two separate quality issues at Spirit AeroSystems. These adjustments reflect the company’s commitment to addressing quality and production concerns to ensure the safety and reliability of its aircraft.
Following the announcement of the financial results, Boeing’s shares rose by approximately 3% in premarket trading. The response from investors suggests optimism in the company’s ability to overcome the current challenges and regain its position in the aerospace industry.
Boeing’s determination to address quality issues, enhance its supply chain, and increase production rates underscores its commitment to delivering safe and reliable aircraft to meet the growing demand for air travel worldwide.