Grounded jet sends Boeing to first annual loss in 2 decades

Grounded jet sends Boeing to first annual loss in 2 decades

Boeing is posting its first annual loss in more than two decades and said the costs related to the grounding of its best-selling plane have doubled to more than $18 billion.

The company's fourth-quarter earnings report, released on January 29, shows Boeing suffered a year-over-year fourth-quarter net loss of $1.01 billion (based on GAAP accounting standards) or $2.53 billion (based on non-GAAP standards).

Boeing stock rebounded slightly on the quarterly report after suffering its deepest decline since the MAX grounding last March earlier this month.

Boeing Co. (NYSE: BA) reported fourth-quarter and full-year 2019 results before markets opened Wednesday morning.

"We recognize we have a lot of work to do", David Calhoun, who took over as Boeing's president and CEO this month, said in a statement.

For the full year, Boeing reported a net loss per share of $3.41 and revenues of $76.56 billion, compared with year-ago EPS of $16.01 and revenues of $101.13 billion. Boeing suspended production on the plane earlier this month. Boeing had initially targeted 737 MAX approval in 2019, a timeline that proved overly optimistic and, coupled with criticism over the company's culture, contributed to former CEO Dennis Muilenburg's departure. "Were we as transparent as we needed to be when we did find out? No".

Spirit AeroSystems SPR.N on Thursday said its chief financial officer had resigned after the company identified some accounting irregularities, adding to the woes of the aero-parts maker as it grapples with the 737 MAX crisis.

The MAX charges include $8.3 billion to compensate airline customers that are cancelling flights and scaling back growth plans in a hit to profits while their MAX jets remain grounded.

In October, Boeing also said it will reduce 787 production per month from 14 to 12 in late 2020.

Documents released recently by Boeing regarding design and certification of 737 Max airplanes revealed that the employees mocked regulators and admitted flaws with the plane.

Boeing rose 1.6% to $321.56 at 11:29 NY, after climbing as much as 3.4%. "Safety will underwrite every decision, every action and every step we take".

Still, much of the bad news is already baked into the stock.

There have been layoffs at some US suppliers with more expected as a return to Max production and deliveries remains stalled.

It is the first loss at the American manufacturer since 1997. The agreement is based on "several assumptions" including "Boeing's expected production rate and the successful return of the 737 Max to service".

Analysts said the charge for airline compensation was anywhere from $4 billion to $6 billion less than most investors had feared.

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