Boeing Co (NYSE:BA) stock rose over 1.5% in the pre-market session of Jan 28th, 2021 (Source: Google finance) on better-than-expected performance. The company had reported 15 percent fall in the adjusted revenue to $15.3 billion in the fourth quarter of FY 20, beating the analysts’ estimates for revenue of $15.07 billion.
The firm posted a record annual loss of nearly $12 billion, taking a $6.5 billion charge in the fourth quarter on its newest airplane which it now doesn’t expect to debut until 2023, more than two years behind schedule.
The company’s problems started from two deadly 737 Max crashes have snowballed in the coronavirus pandemic. A plunge in travel demand has roiled airlines’ finances and devastated sales, including of its newest jet, the 777X. Those weaker appetites and additional scrutiny of new aircraft after the 737 Max crisis will delay deliveries of the 777X plane.
That wide-body jetliner is used for international routes, which are suffering the most in the pandemic. Its 777X program had already been beset by engineering delays. Boeing now expects to deliver the first one at the end of 2023, more than two years later than its forecast last April, because of weaker demand and increased certification requirements in the wake of the 737 Max crisis.
Further, the pandemic’s impact on longer, international flights is compounding problems for Boeing’s 787 Dreamliners. The company had previously cut output of those jets and additional scrutiny after the production issues has hampered deliveries, which are key to Boeing because it’s when customers pay the bulk of the plane’s price. It said it doesn’t expect to deliver any Dreamliners this month and very few “if any” in February.
BA in the fourth quarter of FY 20 has reported the adjusted loss per share of whopping $15.25. The company also booked a $468 million write-down against “abnormal production costs” on the 737 Max program. The company’s net loss for the three months increased to $8.4 billion from $1.01 billion in the fourth quarter of 2019. It doesn’t expect to return to cash flow positive until 2022.
Meanwhile, European regulators have recently lifted their safety ban on the planes. U.S. aviation regulators had done so in November, allowing Boeing to start delivering roughly 400 new jets it had in storage at its Seattle-area facility.