New York (AFP) - Boeing reported a bigger-than-expected quarterly loss Wednesday due to persistent quality control problems with its jets, but shares rallied as it maintained key medium- and long-term targets.
The company reported a loss of $425 million, compared with a $1.2 billion loss in the year-ago period, reflecting the continued drag from supply chain issues across its commercial and defense businesses.
Boeing's revenues came in at $17.9 billion, up 28 percent from the year-ago period and topping analyst expectations, but under the level of the pre-pandemic 2019 first quarter.
The planemaker affirmed its full-year outlook for operating cash flow, a key metric, and for 737 plane deliveries in 2023.
Boeing executives also expressed hope of a resumption of new plane deliveries to China after regulators in the huge market released an aircraft evaluation report for the 737 MAX.
"We are progressing through recent supply chain disruptions but remain confident in the goals we set for this year, as well as for the longer term," said Chief Executive Dave Calhoun.
Boeing's commercial plane program has been beset with various manufacturing and quality control issues that have limited deliveries for its top-selling jets, the 737 and 787.
On defense, Boeing disclosed a new $245 million charge of one-time costs connected to the KC-46A Air Force tanker, also related to supplier issues.
The most recent issue in the commercial business stems from a supplier part problem on the 737 that will affect near-term deliveries.However, Boeing still expects to increase production of the plane later in 2023 and again in the 2025/26 timeframe, the company said in a press release.
The latest 737 issue will mean some planes won't reach airline customers in time for the summer travel season, Calhoun said.
"It costs some real money, so apologies everyone," Calhoun said on CNBC, while adding that the company had anticipated some delays when it set earlier targets.
Calhoun said the cadence of the MAX production ramp-up is determined by supply chain challenges rather than demand.
He said the current travel market is "in a demand-crazy moment."
Costs have also been elevated due to rework needed on undelivered 737 planes that accumulated during the 20-month grounding of the jet following two fatal crashes.
Boeing had about 450 planes in storage at one point after the MAX was finally cleared to resume flights in November 2020.The number is currently in the low-200s, Calhoun said.
China deliveries ahead?
While the company's forecasts do not incorporate a resumption of new deliveries to China, "we are working very hard to regain China," Calhoun told analysts on a conference call.
Chinese airlines have resumed flights on the MAX after Beijing finally cleared the jets back for service much later than other regulators.
However, a hefty portion of the built 737 MAX planes still in inventory were originally intended for China.Those planes have been in limbo.
Calhoun said he was encouraged by the recent publication of a 737 evaluation report by the Civil Aviation Administration of China.
Calhoun has previously suggested that Boeing's prospects were tied to the brittle state of US-China relations, but said Wednesday that the planes will be needed to meet surging demand in the country.
"Our customers in my view are going to need more airplanes in the relatively near to medium to term and this is a pretty easy way for them to satisfy that need," Calhoun said."No geopolitical discussion is actually required here."
Third Bridge analyst Christopher Raite described Boeing's report as "mixed," with the company's confirmation of earlier targets and growing backlog of orders offsetting the disappointing bottom-line result.
"While Boeing's reported results continue to lag the recovery in the post-Covid aerospace industry, there are several bright spots for the company," Raite said.
Shares finished up 0.4 percent at $203.03.
