Boeing reports better-than-feared quarter, says supply chain is stabilizing amid 737 Max crisis

Boeing on Wednesday reported a narrower-than-expected loss and less cash burn than analysts expected, and said it is stabilizing its supply chain as it grapples with its latest 737 Max safety crisis.

“Near term, yes, we are in a tough moment,” CEO Dave Calhoun, who announced in March that he would step down by year-end, said in a note to employees on Wednesday. “Lower deliveries can be difficult for our customers and for our financials. But safety and quality must and will come above all else. We are absolutely committed to doing everything we can to make certain our regulators, customers, employees, and the flying public are 100 percent confident in Boeing.”

Boeing lost $355 million in the first quarter, or 56 cents a share, down from a $425 million, or 69 cent per-share loss a year earlier. Revenue fell 8% to $16.57 million, slightly ahead of analysts’ estimates. Excluding one-time items, Boeing lost $388 million, or $1.13 a share, a narrower loss than analysts expected.

Here’s what the company reported compared with what Wall Street analysts surveyed by LSEG were expecting:

• Loss per share: $1.13 adjusted, vs. estimated adjusted loss $1.76
• Revenue: $16.57 billion, vs. estimated $16.23 billion

Boeing has been hamstrung in ramping up production, especially of its best-selling 737 Max planes. After the door plug blew out on the Alaska Airlines Max 9 on Jan. 5, the Federal Aviation Administration has barred Boeing from increasing output. The FAA also said it found numerous issues of noncompliance along Boeing’s supply chain.

“We are using this period, as difficult as it is, to deliberately slow the system, stabilize the supply chain, fortify our factory operations and position Boeing to deliver with the predictability and quality our customers demand for the long term,” Calhoun said. “As these efforts begin to take hold, we’re seeing early signs of more predictable, stable and efficient cycle times in our 737 factory, and expect this will continue to slowly improve.”

Questions abound for Boeing’s lame duck CEO Calhoun.

Among those questions: When will Boeing stabilize its production line and increase production of the 737 Max and other planes? When will Boeing appoint a new CEO? How much will the current crisis cost Boeing? When might Boeing finalize a deal to buy back fuselage maker Spirit AeroSystems.

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