- Boeing said its costs in the first quarter rose $1 billion due to its 737 Max planes being grounded.
- The aeronautics company's revenue fell 2 percent from the year-ago period, while earnings slid 18 percent.
- Boeing withdrew its full-year 2019 forecast, saying it didn't reflect the impact of the problems surrounding the 737 Max.
Boeing said Wednesday that costs tied to the global grounding of its 737 Max plane jumped $1 billion in the first quarter. The aeronautics giant reported that earnings from operations dropped 18 percent, while per-share profit landed at $3.16, in-line with analyst expectations. Revenue fell 2 percent to $22.9 billion, from $23.4 billion a year ago.
The company withdrew its full-year 2019 earnings forecast, saying it didn't reflect the financial impact of the 737 Max's problems and that it would issue a new forecast "at a future date."
Boeing is trying to stem the damage from a halt in deliveries of the 737 Max after its grounding following two crashes that resulted in the deaths of 346 people -- the March crash of an Ethiopian Airlines 737 Max flight and the October crash of a Lion Air flight. The company has said it's working to fix a software issue that may have contributed to the tragedies.
Fewer deliveries of the 737 Max also cut into another measure closely watched by investors: cash. Boeing's operating cash flow, a measure closely watched by Wall Street analysts, fell 11 percent in the quarter to $2.8 billion, the Chicago-based company said in a statement.
Boeing in recent years has used cash generated by the demand for the 737, the world's most widely flown commercial aircraft, to invest in new plane technologies and to buy back tens of billions in its own stock. The company gets paid when an aircraft is delivered to an airline or other customer.
In all, the delay in 737 Max deliveries could cut $10 billion from Boeing's cash pile in 2019, Bloomberg reported, citing analysts before Boeing results were released. Some experts predict the aircraft won't return to service until October.
The 737 Max fleet remains grounded and new deliveries are suspended. Earlier this month. Boeingfrom 52 a month to 42. Deliveries fell to 149 commercial aircraft in the first quarter, 35 fewer than in the same period a year ago.
Boeing stock has dropped about 11 percent since the Ethiopian crash amid a perception that management was too slow to act, erasing $27 billion in market value. The drop stems from a range of concerns, including problems with flight-control software on the 737 Max itself and reported lapses in regulatory oversight by the Federal Aviation Administration of the 737 model and its 787 Dreamliner aircraft.
The company is making "steady progress on the path to final certification for a software update" for the 737 Max, Muilenburg said Wednesday. Boeing shares, which rose 2 percent ahead of the start of trade on Wednesday, are up roughly 13 percent this year as investors bet those concerns will eventually subside.
"What the market (and the public for that matter) will need to see to gain confidence looking ahead is an earnest and open effort to address concerns," Carter Copeland, an analyst with Melius Research wrote in a note ahead of the company's latest results. "We think there's evidence that [Boeing] has started to move more in that direction, but the market and the flying public will inevitably need much more."