Boeing has said it will record an after-tax charge of $4.9 billion, or $8.74 per share, in connection with the grounding of the 737 Max.
The plane is currently out of operation following two crashes, in Indonesia and Ethiopia.
The charge, which also reflects associated delivery delays, will result in a $5.6 billion reduction of revenue and pre-tax earnings when Boeing reports quarterly earnings on July 24th.
While the entire estimated amount will be recognised as a charge in the second quarter, the company expects any potential concessions or other considerations to be provided over a number of years and take various forms of economic value.
“We remain focused on safely returning the 737 Max to service,” said Boeing chairman, Dennis Muilenburg.
“This is a defining moment for Boeing.
“Nothing is more important to us than the safety of the flight crews and passengers who fly on our airplanes.
“The Max grounding presents significant headwinds and the financial impact recognized this quarter reflects the current challenges and helps to address future financial risks.”
Additionally, Boeing’s estimated costs to produce the aircraft in the 737 accounting quantity increased by $1.7 billion in the second quarter, primarily due to higher costs associated with a longer than expected reduction in the production rate.
The increased 737 program costs will reduce the margin of the 737 program in the second quarter and in future quarters.
Boeing chief financial officer, Greg Smith, added: “We are taking appropriate steps to manage our liquidity and increase our balance sheet flexibility the best way possible as we are working through these challenges.
“Our multi-year efforts on disciplined cash management and maintaining a strong balance sheet, in addition to our strong and broad portfolio offerings, are helping us navigate the current environment.”
Boeing continues to work with civil aviation authorities to ensure the 737 Max’s safe return to service, and these authorities will determine the timing of return to service.
For purposes of the second-quarter financial results, the company has assumed that regulatory approval of 737 Max return to service in the Unites States and other jurisdictions begins early in the fourth quarter 2019.
However, this assumption reflects the company’s best estimate at this time, rather than a concrete deadline.
“Text, images, and video are the paint swatches of 21st-century artists — with a single catch: this form of art has to communicate, engage, and sell.” ― Laura Busche – Visit THE ONLINE PUBLISHERS for high quality content creation services and professional, artistic photography.
Trending social media posts.
Companies and Foreign Direct Investments.
The Best Way To Go About Finding FDI? To know more >> Theinternationalcampaigner.com
TOP Offers 3 Great Reasons To Choose Them For Press Release Help.
4 Methods To Making Money With Social Influencer Marketing Platform TOP.
Benefits of Digital Marketing to Your Business.
Where To Get Great Ebooks For Reading. To more onlinelobbying.com.
Finding Unique Content In TOP Photos Gallery. To more click https://topphotosgallery.com/.
Looking for New Ebooks To Read With TOP.
5 Reasons To Get Online Reviews Done With TOP.
2 Ways To Get More Results With Your Ads.
Finding Reputation Repair With TOP Brings These 3 Benefits
One Step To Getting Great Online Reviews.
4 Reasons To Go With TOP For Content Creation.
4 Reasons to Go With TOP When Searching For Translation Service Help.
content publishing and digital marketing.
Yves Saint Laurent: The Last Collections review – shocking portrait of a fashion legend.
How & Where to Gamble When Travelling in the Middle East.
Hiccups in a newborn could mean their brains are developing say researchers.
Prada will host its Resort 2021 fashion show in Japan.
How to find out if you’re eligible for Italian citizenship by descent.