Dow 30 component Boeing (NYSE: BA) is the world’s largest aerospace company and leading manufacturer of commercial jetliners and defense, space and security systems.
Boeing reported its quarterly earnings confirming an operating loss of $2.53B, or $2.33/share, in comparison to a profit of $3.87 billion, or $5.48 per share, a year earlier. The associated cost of the 737 MAX doubled to nearly $19B. The company plans to cut production of 787 Dreamliner aircraft to 12 per month in late 2020 from 14 and further expects the production to move down to 10 in 2020 hurting cashflow.
The company has been struggling with the settlement of more than 100 lawsuits from victims’ families, airlines and is under U.S. criminal investigation. Costs amounting to $14.6 billion were caused due to the grounding of 737 MAX in 2019 and the planemaker foresees another $4B in charges for 2020.
“I can’t market it or merchandise it or hang banners on it or change the name of it. That won’t convince anybody. But when they see it operating and they see it flown and they see pilots getting on, I think we’re gonna be okay,” stated CEO David Calhoun on the uncertainty of its 737 Max aircraft gaining travelers confidence back again.
Boeing reported a negative free cash flow of $2.67B for the quarter ending Dec. 31, in comparison to a positive free cash flow of $2.45B a year earlier.
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