Boeing on Thursday said it will take a $4.9 billion charge in the second quarter due to the worldwide grounding of its 737 Max planes after two fatal crashes that killed 346 people.
The charge, which comes to $8.74 a share, is set to wipe out profits. Analysts expected the company to book a per-share profit of $1.80 for the second quarter, according to average estimates compiled by Refinitiv. The charge would reduce revenue and pre-tax earnings by $5.6 billion in the quarter, Boeing said.
The 737 Max jets have been grounded since mid-March and regulators have not said when they expect to allow the planes to fly again.
The Chicago-based manufacturer said the charge is an estimate of concessions for Max customers who have been left without the fuel-efficient planes during the peak summer travel period and through much of the fall with no end in sight to the grounding. It said it expects to compensate customers over several years but book the entire charge in the second quarter.
Regulators grounded the 737 Max fleets after the second of two fatal crashes within five months of one another. Investigators in the crashes — a Lion Air flight in Indonesia in October and an Ethiopian Airlines flight in March — implicated an automated stall-prevention feature on the jetliners. Boeing has developed a fix for the software but regulators haven’t yet signed off on it yet.
Boeing said it is assuming that the planes will return to service early in the fourth quarter of this year but warned that could also be later, a challenge for carriers during the Thanksgiving and Christmas travel periods.
The crisis prompted Boeing to slash protection of the Max jets by nearly a fifth to 42 a month and pause deliveries of the planes, which are piling up in storage facilities and even an employee parking lot. Boeing said its results will assume a production increase to 57 a month in 2020.
Airlines, including Southwest, American and United, have canceled thousands of flights and repeatedly pushed back the planes’ return to their schedules with little guidance on when the aircraft could take to the skies again.
Boeing is set to report full second-quarter results and hold a call with analysts on Wednesday.
The Online Publishers “TOP” is seeking successful bloggers who have found their niche and are developing their blogging career.
Why TOP Platform Is A One Stop Shop For Making Money Online.
TOP Helps You Earn Money As A Social Media Influencer From Home.
The True Benefits of Online Reviews.
TOP Is Where To Turn For Public Relations Help.
3 Reasons To Go With TOP For Social Media Marketing Help.
The Helpful Trend It Service.
How TOP Platform Solves A Need For Influencers Marketing.
Photographers Can Earn Through TOP Photos Gallery Selling.
Looking For The Right Ebooks To Read With TOP.
Why Online Reputation Repair Service From TOP Pays
4 Benefits To Doing Online Reviewer Work With TOP.
5 Reasons You Should Go With Top For Online Reputation Management At All Times
2 Benefits To Getting Reviews Through TOP.
One Reason You Should Partner With TOP Today. To more >>> online translators platform.
3 Reasons Why You Should Trust TOP For Finding Translation Services.
The Importance of Online Translation Sites.
How to attract Foreign Direct Investments (FDI) in a country.
Coffee drinkers have healthier gut microbiotas.
How To Find The Right Influencer.
Coty plans sale of professional beauty division.
Canada expects a 40 per cent increase in citizenship among immigrants by 2024 .
