Boeing (BA) shares moved lower Friday after the world's biggest planemaker said it will relocate its corporate headquarters to the suburbs of Washington, D.C.
In a move widely seen as an effort to improve its relationship with regulators following a very public scolding by the Federal Aviation Administration, as well as big-name lawmakers on Capitol Hill, Boeing will leave its Chicago hub, its base for the past 20 years, for a new corporate headquarters in Arlington, Virginia, just a few miles away from the Pentagon.
"We are excited to build on our foundation here in Northern Virginia. The region makes strategic sense for our global headquarters given its proximity to our customers and stakeholders, and its access to world-class engineering and technical talent," said CEO Dave Calhoun. "We greatly appreciate our continuing relationships in Chicago and throughout Illinois. We look forward to maintaining a strong presence in the city and the state."
Boeing shares were marked 2% lower in mid-morning trading Friday to change hands at $147.47 each, a move that would extend the stock's year-to-date decline of around 29.3%.
Boeing's reliance on a good relationship with the FAA, which was critical of its safety and reporting procedures following fatal crashes of the 737 Max in 2018 and 2018 that ultimately lead to the firing of former CEO Dennis Muilenburg, was evident in the group's most-recent earnings report.
The planemaker said it submitted a certification plan to the FAA that it hopes could see it resume 787 Dreamliner deliveries later this year, a move that mitigated the surprisingly wide first quarter loss of around $1.5 billion.
The FAA began looking into issues with the Dreamliner's fuselage in September of last year, just days after the planemaker grounded eight of the giant jets, which were made in South Carolina, after finding flaws that raised questions about their structural integrity and the risk of potential in-flight failures.
Production of the 737 MAX, the group's workhorse jet that was only recently approved for return to service following fatal crashes in 2018 and 2019, should rise to 31 aircraft per month this year, Boeing said.
Boeing posed an adjusted core loss for the three months ending in March of $2.75 per share, down from a loss of $1.53 per share over the same period last year but well outside the Street consensus forecast of a 25 cents per share loss.
Boeing took one-time charges of around $1.2 billion linked to the impact of its businesses in Russia as well as the Air Force One Presidential jet.
Group revenues, Boeing said, fell 8% from last year to $14 billion, a tally that also missed analysts' forecasts of a $16.02 billion tally. Free cash flow was estimated at -3.6 billion for the quarter, Boeing said, but the group reiterated its forecast to turn the figure positive in 2023.
