NEW YORK – Boeing reported a surprise US$3.3 billion (RM15.56 billion) third quarter loss today because of swelling costs on several defence programmes due in part to supply chain expenses.
The aviation giant reported a 4% rise in revenues to US$16 billion, which also missed analyst estimates.
On the upside, Boeing reaffirmed it is on track for positive free cash flow in 2022.
The company flagged a number of fixed-price defence contracts that have been hit with surging costs, including the KC-46, an aerial refuelling and strategic military transport aircraft, and the US presidential plane, Air Force One.
Boeing also said costs were rising in other unspecified defence programmes.
The losses in these projects were “driven by higher estimated manufacturing and supply chain costs, as well as technical challenges,” Chief Executive Dave Calhoun said in a letter to employees.
“Nearly every industry is navigating broad supply chain, inflation, labour and macro-economic challenges – and we’re certainly no different. We’re realistic about the environment we face and are taking comprehensive action.”
Calhoun closed his letter by saying that “turnarounds take time,” adding “we have more work to do – but I am confident in our team and the actions we’re taking for the future.”
The difficulties in Boeing’s defence programme came as the company saw a jump in revenues in its commercial aeroplane division following the resumption of deliveries of the 787 Dreamliner and an increase in deliveries of the 737 MAX.
But Boeing was expected to face questions on an investor conference call later today on the timing of the resumption of MAX deliveries to China and also on the regulatory outlook for its latest version of the plane, the 737 MAX 10, which has still not been certified by US authorities.
Shares dipped 0.4% to US$146.00 in pre-market trading. – AFP, October 26, 2022
