Boeing Co. today reported a $641 million first-quarter loss as the 737 Max aircraft remained grounded and the novel coronavirus (COVID-19) slashed demand for the company’s aircraft.
The Chicago-based company also said it burned through $4.3 billion during the quarter. Separately, the aircraft maker told employees in a letter that it will cut 10 percent of jobs because of a fall in travel demand due to the pandemic, Reuters reported. Boeing has about 160,000 employees.
Boeing’s quarterly loss on a per-share basis was $1.11. A year earlier, Boeing posted a profit of $2.15 billion, or $3.75 a share.
The company also reports “core” earnings, which exclude some items. On that basis, Boeing reported a loss of $1.7 billion, or $1.70 a share. That compares with core earnings of almost $2 billion, or $3.16 a share, in 2019’s first quarter. Quarterly revenue fell 26 percent to $16.9 billion.
The 737 Max, one of the company’s most important aircraft, has been grounded since March 2019 following two crashes that killed 346 people. Boeing’s directors in December fired CEO Dennis Muilenburg, a target of criticism in Congress over how the company handled the 737 Max.
"The COVID-19 pandemic is affecting every aspect of our business, including airline customer demand, production continuity and supply chain stability," Muilenburg’s successor, David Calhoun, said in a statement. Calhoun had been a director and he took command of Boeing in January.
COVID-19 has prompted airlines to cut their schedules, park their aircraft and delay purchases. That was reflected in Boeing’s commercial aircraft deliveries for the quarter – 50 compared to 149 a year earlier.
The company said it expects to resume 737 Max output “at low rates” this year depending on “timing and conditions of return to service.” That will rise gradually to 31 a month in 2021. Boeing also said it’s reducing the pace of 787 production. That will go to 10 a month from 14 this year and be reduced to seven a month by 2022.
In an attempt to conserve cash, Boeing has suspended its dividend and paused stock buybacks. At the end of the quarter, Boeing had $15 billion in cash. The company is seeking U.S. government aid for itself and its supply chain.