Boeing reports 1st revenue drop in 7 quarters but beats expectations
Boeing on Wednesday reported its first quarterly revenue drop in seven quarters, but the U.S. planemaker beat Wall Street expectations that were lowered after a January mid-air blowout of a cabin door prompted it to slow production of its strongest-selling jets.
Boeing said its first-quarter cash burn, a metric closely watched by investors, was $3.93 billion, better than average analyst expectations of a cash burn of $4.49 billion.
In March, Boeing indicated it would use between $4 billion and $4.5 billion due to a crisis following the Jan 5 accident involving a nearly new 737 MAX 9 jet.
The company’s shares, which have sunk 35% year to date, were up 3.6% in volatile premarket trading after its loss per share was narrower than expected.
“Well it could have been worse. While the loss and the cash outflow are not as bad as feared, the company is still clearly facing some serious challenges in the Commercial
Aircraft division that will take some fixing,” Vertical Research Partners analyst Robert Stallard said in a note.
Since the Jan. 5 accident on an Alaska Airlines-operated jet, the U.S. Federal Aviation Administration (FAA) has imposed a cap on production of Boeing’s strong-selling 737 MAX jets. The FAA also has told Boeing to develop a comprehensive plan to address “systemic quality-control issues.”
Before the report, CEO Dave Calhoun, who will step down around year end, said in a letter to employees on that Boeing was “in a tough moment,” slowing the system to improve quality and safety.
“Lower deliveries can be difficult for our customers and for our financials. But safety and quality must and will come above all else,” he added.
Reuters reported this month that output of Boeing’s cash-cow 737 MAX had fallen sharply
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