Boeing reports £2.9bn loss in defence programme-related costs

Boeing on Wednesday reported a surprising third-quarter loss of $3.3 billion (£2.9 billion), due to lower-than-expected revenue and huge losses on fixed-cost government programs including the new Air Force One presidential jet.

The U.S. multinational has blamed rising manufacturing and supply chain costs for the losses on government programs.

Chief Executive David Calhoun said Boeing was still in a “challenging environment” and that “there is more work to be done to drive stability.”

Adjusted loss was $6.18 (£5.43) per share on revenue of $15.96 billion (£14.02 billion). Analysts had expected earnings of 13 cents (11.4 pence) a share on revenue of $17.91 billion (£15.74 billion).

Shares of the company were down about 1% in pre-market trading.

Revenue from Boeing’s usually stable defence and space business fell 20% as it took a $2.8bn (£2.5bn) loss on its military tanker Air Force One, which was built by NASA A project of a spacecraft that can transport astronauts to space. International Space Station and other projects.

Boeing has previously reported huge losses on the projects, including around $1bn (£878.5m) related to building two new presidential jets, a deal it struck with then-President Donald Trump .

Boeing’s commercial jet business has seen an improvement recently as air travel has increased and airlines have sought new planes. On Wednesday, Alaska Airlines announced that it would exercise its option to buy another 52 737 Max jets.

Revenue from Boeing’s airline business soared 40% year-on-year as more planes were delivered, but it still lost $643m (nearly £565m), only slightly less than a year ago.

Boeing was unable to deliver any of the large 787 jets to airlines for the better part of two years because of production defects, although it resumed deliveries in late August, providing the company with a significant source of cash.

In a letter to staff, Mr Calhoun said Boeing was making strides “in our turnaround efforts” and highlighted that the company generated $2.9bn (£2.5bn) in the quarter. free cash flow.

“That said, we are still in a challenging environment and more work needs to be done to ensure we consistently deliver on our commitments and rebuild the strength of our company,” he said.

He added that the Boeing production facility “is not pushing the system too fast. We will slow down if necessary” to make sure the job is done.