Boeing posts first-quarter loss of $1.2bn as sales fall

Boeing has posted a net loss of more than $1.2 billion in the first quarter, underpinned by a dip in sales and charges relating to the Russian war in Ukraine.

The loss in the three months to the end of March was about $681 million more than the US plane maker suffered in the same period last year.

Revenue dropped by 8 per cent a year to about $14bn in threemonth period as a result of “lower defence volume and charges on fixed-price defence development programmes”, the company said. However, this partially offset by an increase in commercial services volumes.

The loss per share of $2.06 also “reflects $212m of pre-tax charges” related to the impact of the war in Ukraine.

“You will see we still have more work to do ... but I remain encouraged with our trajectory and we are on track to generate positive cash flow for 2022,” president and chief executive Dave Calhoun said in an employee memo on Wednesday.

Sales for Boeing’s commercial aircraft unit dropped by about 3 per cent on an annual basis to about $4.2bn in the first quarter.

The unit, which delivered 95 aircraft during the quarter, suffered a 20.6 per cent drop in operating margin that reflected “abnormal costs and period expenses, including charges for impacts of the war in Ukraine” and higher research and development expenses.

Boeing’s 737 Max fleet has clocked up more than a million flight hours since late 2020, with the jet’s safe return to service almost complete.

The 737 production rate continues to increase and is expected to rise to 31 planes a month during the second quarter.

The backlog of the Commercial Airplanes division included about 4,200 planes valued at $291bn. While the first quarter brought new challenges for the industry, Mr Calhoun said he was “proud of our team and the steady progress we are making towards our key commitments”.

“We increased 737 Max production and deliveries and made important progress on the 787 by submitting our certification plan to the FAA [Federal Aviation Administration] ... despite the pressures on our defence and commercial development programmes, we remain on track to generate positive cash flow for 2022,” he said.

The company said the 787 “rework” had been completed on the initial jets and it continues to work closely with the FAA on when deliveries will resume.

“The programme is producing at a very low rate and will continue to do so until deliveries resume, with an expected gradual return to five per month over time,” Boeing said.

“The company continues to anticipate 787 abnormal costs of approximately $2bn, with most being incurred by the end of 2023.”

Revenue from defence, space and security fell by 24 per cent to about $5.5bn in the first quarter. The Chicago-based company’s research and development spending increased by more than 26 per cent in the quarter to $633m, Boeing said.

Boeing’s global services unit’s first-quarter revenue increased to $4.3bn, up 15 per cent from the previous year.

During the quarter, the unit secured a fuel-saving digital solutions contract for Etihad Airways’ 787 fleet and was awarded a contract by the US Air Force for KC-135 horizontal stabilisers.

Boeing is focused on improving performance as it works through certification requirements and finishing key programmes that will lead to the emergence of new technology and products, Mr Calhoun said.