Boeing Q2 misses by wide margin

Heidi Chung
·Reporter
Updated
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Boeing’s (BA) second-quarter results missed expectations by a wide margin.

Here are Boeing’s second-quarter results, compared to Wall Street estimates:

  • Revenue: $15.8 billion vs. $20.45 billion expected

  • Adj. loss per share: $5.82 vs. $1.96 earnings per share expected

  • Free cash flow: -$1.01 billion vs. -$2.02 billion

Boeing said that previous guidance did not reflect the impact of the 737 MAX groundings and new guidance will be issued at a future date. Boeing reported total backlog of $474 billion, which included more than 5,500 commercial airplanes. In the second quarter, Boeing’s commercial airplane deliveries fell 54% to 90 airplanes, down from 194 deliveries last year.

SEATTLE, WA - JUNE 27: Boeing 737 MAX airplanes are stored on employee parking lots near Boeing Field, on June 27, 2019 in Seattle, Washington. After a pair of crashes, the 737 MAX has been grounded by the FAA and other aviation agencies since March, 13, 2019. The FAA has reportedly found a new potential flaw in the Boeing 737 Max software update that was designed to improve safety. (Photo by Stephen Brashear/Getty Images)
Grounded Boeing 737 MAX airplanes are stored on employee parking lots near Boeing Field in Seattle, Washington. (Photo by Stephen Brashear/Getty Images)

"This is a defining moment for Boeing and we remain focused on our enduring values of safety, quality, and integrity in all that we do, as we work to safely return the 737 MAX to service," CEO Dennis Muilenburg said in a statement. "During these challenging times, teams across our enterprise continue to perform at a high level while delivering on commitments and capturing new opportunities driven by strong, long-term fundamentals."

Boeing's Q2 financial results (Boeing)
Boeing's Q2 financial results (Boeing)

Last week, Boeing announced that it will be taking a $5.6 billion pre-tax, $4.9 post-tax, hit from the 737 MAX jet woes. The charge includes what Boeing estimates it would have to pay airline customers for groundings and delivery delays. Additionally, Boeing also said that the cost to produce the 737 MAX jets will increase by $1.7 billion in the second quarter. “The increased 737 program costs will reduce the margin of the 737 program in the second quarter and in future quarters,” Boeing said in a statement.

"We remain focused on safely returning the 737 MAX to service,” Muilenburg said. "This is a defining moment for Boeing. Nothing is more important to us than the safety of the flight crews and passengers who fly on our airplanes. The MAX grounding presents significant headwinds and the financial impact recognized this quarter reflects the current challenges and helps to address future financial risks."

Boeing Q2 Commercial Airplane Deliveries (Boeing)
Boeing Q2 Commercial Airplane Deliveries (Boeing)

Though the company now anticipates that the 737 MAX jets will be back in service by early fourth quarter, there are no guarantees. If the jets are not back in the air by then, there could be additional costs for Boeing. “While we approach this target with a degree of skepticism due to numerous false starts to date and uncertainties ahead, we note it is the first time the company has proactively put forth a date, creating a level of confidence when key regulators such as EASA and TCCA are closely coordinating with the FAA to reverse the grounding,” Morgan Stanley wrote in a note Friday.

Boeing announced that it aims to produce 57 737 MAX planes per month in 2020.

The company’s earnings conference call kicks off at 10:30 a.m. ET.

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Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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