We will also deal with similar topics at our Portfolio Investment Day 2024 conference on May 16, in which participation is free after registration.
Boeing’s revenue fell 8 percent to $16.57 billion in the first quarter, the first decline in seven quarters. The decline is related to the slowdown in aircraft production, after an incident on one of Alaskan Airlines’ flights at the beginning of January forced the company to slow down production.
The amount of cash burn in the first quarter was 3.9 billion dollars, which shows a significant increase compared to the value of 786 million dollars a year earlier.
Boeing’s use of free cash flow fell in the range of $4 billion to $4.5 billion in March, which is higher than previously projected in January. This change occurred due to the crisis experienced by the company, which also resulted in the restructuring of the company’s management.
After the accident of an Alaska Airlines plane on January 5, the Federal Aviation Administration (FAA) introduced restrictions on the production of Boeing’s most trafficked 737 MAX aircraft. The FAA also asked the company to develop a comprehensive plan to address quality control issues.
CEO Dave Calhoun stressed in a letter to employees that the company is going through a difficult time. He also emphasized that improving quality and safety is a priority. Calhoun also noted that a significant number of 737 and 787 aircraft will be delivered by the end of the year, and he also highlighted the performance improvement of their defense business.
Production of the 737 MAX fell sharply following the decision of American regulatory authorities to increase factory inspections. Analysts say this could cause delays in achieving Boeing’s financial and production goals.
The company expects production and deliveries of its large-body aircraft to grow more slowly due to shortages of some key components from its suppliers. Despite this, there is still strong demand for new aircraft.
In the quarter ending in March, a total of 67 737 aircraft were delivered, which is 41 percent less compared to the same period of the previous year. Adjusted loss per share for the period was $1.13, down from $1.27 in the prior year’s first quarter.
Boeing’s share price is down 32.8 percent this year.
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