Boeing Co. lost $109 million in the third quarter as it struggled with production problems that have held up deliveries of the 787, a large plane popular on long international airline routes.
Boeing said Wednesday it is building about two 787s a months and expects to stay at that low rate until deliveries resume. Problems including fuselage flaws are expected to cause $1 billion in “abnormal costs,” the company said, including a $183 million charge recorded in the third quarter.
CEO David Calhoun said on CNBC that the company will resume 787 deliveries by following the same process of working with regulators that it used to bring back the 737 Max after two deadly crashes and a worldwide grounding. It took 18 months for Boeing to win regulatory approval of fixes to the Max, including changes to a flight-control system that played a role in the crashes.
Calhoun declined to predict when airlines will resume receiving new 787s. As long as those deliveries are stopped, Boeing is losing a key source of cash.
China was Boeing's biggest market for the Max before the crashes, and the company is still waiting for regulators there to let the plane fly again. If that approval doesn’t come in the next six to 12 months, the company will have to trim plans to boost Max production, Calhoun said.
Boeing is currently building 19 Max jets a month at a plant near Seattle, and aims to boost that to 31 a month early next year, a goal that Cowen aerospace analyst Cai von Rumohr called “ambitious.”
Boeing also took a $185 million charge in the third quarter for its troubled Starliner space capsule. The company plans to try to launch the capsule in another test flight next year.
The Chicago-based company offered a hopeful outlook for aircraft sales, saying that the rollout of vaccines against COVID-19 and easing of global travel restrictions will boost demand for planes.
The $109 million loss attributable to shareholders compared with a loss of $449 million in the same quarter last year, when the pandemic caused demand for new planes to collapse.
The most recent loss amounted to 19 cents per share, but the loss excluding special items was wider, at 60 cents per share. Wall Street expected an adjusted loss of 20 cents per share, according to a FactSet survey of 16 analysts.
Von Rumohr called it a deck-clearing quarter. While the core loss was wider than expected, cash outflow was not as bad as feared, he said in a note to clients.
Boeing's commercial airline business suffered an operating loss of $693 million even as revenue rose 24% to $4.46 billion. Boeing delivered 85 jets, mostly Maxes, to airlines and other customers in the quarter, up from 28 a year earlier.
The company's defense and space division earned $436 million and its services wing earned $644 million, providing a sense of stability during all the turmoil in the commercial-airplanes business.
Boeing's total revenue was $15.28 billion, far short of the $16.70 billion forecast by analysts. Two years earlier, before the pandemic, quarterly revenue was $19.98 billion.
The shares fell a fraction of 1% in morning trading, to $209.16.