Boeing reports large loss on $3.8 bn costs tied to 787 woes
Boeing reports large loss on $3.8 bn costs tied to 787 woes
Boeing reported a hefty fourth-quarter loss Wednesday on mounting costs associated with the widebody 787, of which it has suspended deliveries due to quality problems.
The US aviation giant accounted for a total of $3.8 billion in one-time expenses associated with compensating airlines for delayed deliveries and more costly production processes.
Those costs were the biggest factor in the company's $4.1-billion quarterly loss.
Revenues fell 3.3 percent to $14.8 billion.
The difficulties with the 787 dampened Boeing's momentum as the airline industry recovers from a devastating slump due to Covid-19. In a positive, though, Boeing has resumed deliveries of 737 MAX, which was grounded for 20 months following two deadly crashes.
Chief Executive David Calhoun described 2021 as a "rebuilding year," noting the progress on the 737 MAX.
"On the 787 program, we're progressing through a comprehensive effort to ensure every airplane in our production system conforms to our exacting specifications," he said. "While this continues to impact our near-term results, it is the right approach to building stability and predictability as demand returns for the long term."
Boeing said it was working with US air safety regulators on the 787 but did not offer a timetable for resuming deliveries. It is currently producing the jet "at a very low rate."
Boeing doubled its estimates for total "abnormal costs" associated with the problems to $2 billion after concluding in the fourth quarter that the issues "will take longer than previously expected" to resolve.
Shares rose 1.3 percent to $206.80 in pre-market trading.
C.P.Wilson--RTC
