Boeing Co (NYSE: BA) reported weaker-than-expected first quarter earnings before markets opened on Wednesday. The aerospace giant’s profit sank 21% in the March quarter largely due to the problems that hit its bestselling 737 Max plane.
Boeing also withdrew its earnings forecast for fiscal 2019, saying it did not factor the financial effect 737 Max planes grounding has had on the company. The Chicago-based company said in its earnings statement that it would issue a new guidance at a future date.
“Due to the uncertainty of the timing and conditions surrounding return to service of the 737 Max fleet, new guidance will be issued at a future date,” the company said.
Shares of Boeing initially dropped 0.8% in premarket trading immediately following the earnings report. The stock, which is up 16% since the beginning of the year, later jumped 1% to change hands at $378.10 apiece.
Boeing posted net income of $2.15 billion, or $3.75 per share, down from $2.48 billion, or $4.15 per share, in the same period last year. Adjusted for one-time items, earnings declined to $3.16 per share from $3.64 per share. On average, analysts surveyed by Refinitiv were expecting adjusted earnings of $3.16 per share.
The aircraft maker came out with net revenue of $22.92 billion in the quarter, down 2% from nearly $23.4 billion in the prior-year period. Boeing had posted a record revenue of $28.3 billion in the fourth quarter of last year. Analysts had been calling for Q1 2019 revenue of $22.98 billion based on figures compiled by Refinitiv.
Revenues from its commercial airplanes segment were pegged at $11.82 billion, down 9% on a year-over-year basis and below analysts’ estimates of $11.89 billion.
Boeing’s defense, space & security revenue climbed 2% to $6.61 billion, well ahead of $6.39 billion expectations. Its global services unit brought in revenues of $4.62 billion, up 17% and above estimates of $4.45 billion.
Boeing CEO Comments
“Across the company, we are focused on safety, returning the 737 MAX to service, and earning and reearning the trust and confidence of customers, regulators and the flying public,” said Boeing Chairman, President and Chief Executive Officer Dennis Muilenburg. “As we work through this challenging time for our customers, stakeholders and the company, our attention remains on driving excellence in quality and performance and running a healthy sustained growth business built on strong, long-term fundamentals.”
Boeing Company Profile
Boeing manufactures commercial airplanes, provides defense equipment, and maintains a small captive finance division. With headquarters in Chicago, the firm competes with Airbus in commercial aviation and with Lockheed, Northrop, and several other firms in defense.
Sales are split about 70% and 30% between the commercial aircraft and defense end markets. In 2018, Boeing generated over $100 billion in sales.