By Doug Cameron and Andrew Tangel
Boeing Co. reported its largest-ever annual loss and took a big
financial hit on its newest jetliner, signs that the Covid-19
pandemic is compounding the aerospace giant's problems.
The plane maker said the new 777X, its largest passenger jet,
would be at least three years late for airline customers, the
latest Boeing plane to hit trouble following the grounding of the
737 MAX after two fatal accidents. Quality problems with its
popular 787 Dreamliner jet have halted deliveries since
October.
The delay leaves Boeing even more reliant on its defense
business and other troubled commercial-aircraft programs to reverse
heavy losses, as the pandemic has sapped demand for new planes.
Executives said Wednesday they didn't expect Boeing would stop
bleeding cash until next year.
"2020 was a year like no other," Chief Executive David Calhoun
said on an investor call. "Our world, our industry, our business
and our communities were facing unprecedented challenges -- and
we're still in the midst of it."
Mr. Calhoun, who took over as CEO a year ago, began his tenure
facing the MAX crisis, then the largest in Boeing's history. As the
company struggled to restore public confidence, the pandemic
quickly became another all-consuming crisis that has forced Mr.
Calhoun to slash production and cut tens of thousands of jobs.
Now he is managing a smaller company trying to overcome its past
missteps while also keeping up with fierce competition with its
European rival Airbus SE. Boeing last year scrapped plans for an
all-new jet, and Mr. Calhoun on Wednesday said the company was in
no rush to launch a fresh aircraft.
The 777X seats up to about 400 passengers and has folding wings
to fit into airport stands. With production of the 747 jumbo ending
next year, the 777X will become Boeing's biggest plane when it
enters service as soon as late 2023. Airlines don't expect
international flying to recover toward pre-pandemic levels for
three to four years, and are using smaller planes such as the 787
and the Airbus SE A350.
Government travel restrictions have made it tougher for airlines
to fill big planes. Boeing has just 309 orders for the 777X, most
from Middle East carriers such as Emirates Airline that bought them
at the height of the industry's boom several years ago. No U.S.
airlines have ordered the plane.
Boeing said the 777X has also been held back by heightened
regulatory scrutiny. This follows lapses certifying the 737
MAX.
The company lost almost $12 billion last year as total jetliner
deliveries more than halved, with airlines taking thousands of
planes out of service and canceling orders for hundreds more.
Boeing has been plagued by a series of botched jetliner and
military programs that more than halved its market value over the
past two years. That was even before the pandemic halted a
decadelong boom in aircraft sales, prompting the company's plans to
shed 31,000 jobs by the end of 2021.
The $6.5 billion pretax charge on the 777X reflects lower
expected profits over the life of the wide-body plane.
The plane maker's shares were down nearly 3% in midday trading
on Wednesday.
Boeing's fourth-quarter loss of $8.44 billion pushed its annual
deficit to $11.94 billion. Revenue for the year slipped 24% to
$58.2 billion, leaving the industry bellwether as the
fourth-largest aerospace and defense company world-wide by sales
after Raytheon Technologies Corp., Lockheed Martin Corp. and
Airbus.
Chicago-based Boeing expects jetliner revenue to increase this
year as airlines take more 737 MAX jets, with 787 deliveries
resuming by March from a backlog of about 80 that underwent
inspections.
The return of the MAX is likely to also boost revenue, as
customers pay the bulk of the price when they receive a plane.
Global regulators had grounded the aircraft for nearly two years
after the two crashes killed 346 people, but U.S. aviation
regulators approved it for passenger flights again in November
after a series of software, hardware and training changes for the
jets.
European regulators on Wednesday approved the aircraft to resume
commercial flights, and Boeing expects it to be cleared to fly in
all markets by midyear. Officials in Europe, however, have pledged
greater independence from the U.S. in certifying the safety of the
777X and future Boeing models.
Boeing restarted MAX deliveries in December from a backlog of
450 finished planes.
The company burned through $18.4 billion in cash last year as
aircraft deliveries dropped. Boeing has said it doesn't expect to
be cash-flow positive until next year. It still has orders for more
than 4,000 planes, but its backlog of deals shrank by a quarter to
$282 billion.
Monthly production of the MAX is still expected to spool up to
31 in early 2022, with output of the 787 dropping to five later
this year. Boeing said 787 production remains under review because
of the parlous state of international travel demand amid
quarantines and other restrictions.
Boeing reported a per-share loss of $14.65 in the latest
quarter, far worse than analysts expected because of the 777X
charge. It included a previously announced $744 million charge as
part of a $2.5 billion settlement with the Justice Department
related to the MAX that included a fine and compensation for crash
victims' families and customers.
The company also took another $275 million charge for the KC-46A
military tanker. Boeing said the aircraft, long beset by delays and
cost overruns, has faced production disruptions due to Covid-19
infections and quarantines among workers. Its military order book
shrank to $61 billion, in contrast to most rivals' gains, just as
the Pentagon budget is expected to decline following several years
of higher spending.
Andy Pasztor contributed to this article.
Write to Doug Cameron at doug.cameron@wsj.com and Andrew Tangel
at Andrew.Tangel@wsj.com
(END) Dow Jones Newswires
January 27, 2021 13:53 ET (18:53 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
Grafico Azioni Boeing (NYSE:BA)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Boeing (NYSE:BA)
Storico
Da Apr 2023 a Apr 2024