Boeing feels more financial pain from 737 MAX issue

Share

The Chicago plane maker said Thursday the $4.9 billion after-tax charge in the second quarter was related to estimates for "potential concessions and other considerations to customers for disruptions".

Boeing said the charge will result in a $US5.6 billion dent in revenue and pre-tax earnings in the quarter, Boeing said.

Boeing Co plans to report a US$4.9 billion accounting charge with its second-quarter results next week, a sign of the widening financial toll from the company's beleaguered 737 MAX jetliner. In April, Boeing disclosed $1 billion in additional costs due to lowering the production level of the 737 MAX.

Boeing Chief Executive Dennis Muilenburg wrote on Twitter that the company remained focused on safely returning the 737 MAX to service.

Southwest said Thursday that it is taking the plane out of its schedule through November 2, a month longer than previously planned.

The grounding of the 737 MAX has sent shockwaves through the industry and pushed back the launch of a new Boeing aircraft - a twin-aisle jet for the middle of the market known as NMA.

But this timeline was only the company's "best estimate" and actual timing could differ, Boeing said.

76ers, Ben Simmons agree to contract extension
Simmons, 23, will receive a nice steady increase in his pay once the extension kicks in, in 2020-21. The 2016 first overall pick Ben Simmons is one of the most gifted young players in the league now.

Boeing also warned that higher costs cut profit margins on the 737 program in the second quarter and in future quarters.

The company predicts the troubled 737 Max fleet will have approval to return to operation in the fourth quarter of 2019.

That discovery prompted Boeing to say in late June that it expected to present its proposed fix to the FAA 'in the September timeframe'.

Boeing's top-selling 737 MAX was grounded worldwide in March after two deadly crashes in Indonesia and Ethiopia that together killed 346 people.

The unresolved crisis forced Boeing to slash production of the 737 MAX by almost a fifth to 42 planes per month. Boeing did not specify what form the compensation would take, but hinted that it would not be entirely in cash. Nothing is more principal to us than the safety of the flight crews and passengers who waft on our airplanes. Boeing's part mark rose 2% in after-hours buying and selling on Wall Dual carriageway after the announcement, a stamp that merchants are elated with the price.

Boeing's previous 2019 financial guidance did not reflect the MAX problems and the company said the uncertainty and conditions regarding the return to service meant new guidance would be issued at a future date.

Share