Boeing Reports Record Annual Loss, Delays 777X Deliveries to Late 2023
Boeing reported a record net loss that topped $11.9 billion in 2020 — results that worsened after it pushed out when it expects to start deliveries of its 777X plane to late 2023, taking a $6.5 billion charge in the fourth quarter against that wide-body program as the coronavirus pandemic hits aircraft demand.
Boeing’s shares were down close to 3% in mid-morning trading, helping drag down the broader market.
Boeing’s fourth quarter revenue dropped 15% from a year earlier to $15.3 billion, better than analysts’ forecasts for $15.07 billion in sales. The company’s net loss for the three months widened to $8.4 billion from a $1.01 billion in the fourth quarter of 2019.
Here are the numbers:
- EPS: A loss of $15.25 a share
- Revenue: $15.07 billion versus $15.07 expected by analysts surveyed by Refinitiv
2021 is shaping up to be another challenging year for the aviation industry as new travel restrictions and coronavirus infections curb already depressed demand for flights.
“2020 was a year of profound societal and global disruption which significantly constrained our industry. The deep impact of the pandemic on commercial air travel, coupled with the 737 MAX grounding, challenged our results,” CEO Dave Calhoun said in the earnings release.
Boeing’s aircraft deliveries plunged to the lowest in decades, and cancellations hit records last year as the extended grounding of its 737 Max after two fatal crashes and a collapse in travel demand from the pandemic.
Sales in its increasingly important defense, space and security business helped offset some of the weakness, rising 14% in the fourth quarter to $6.78 billion.
The pandemic is upending demand for wide-body planes that are generally used for longer, international flights. Boeing had previously cut production of its 787 Dreamliners, jetliners that are used for long-haul international planes, the type of travel that has been most impacted by the pandemic.
Its 777X program had already been beset by engineering delays. Boeing now says it expects to deliver the first one in late 2023, more than two years later than its forecast last April, because of weaker demand and increased certification requirements in the wake of the 737 Max crisis.
Boeing executives will discuss their results on a 10:30 a.m. ET call with analysts.
The Chicago-based aircraft manufacturer is seeking to turn a page from two crashes of its 737 Max that killed all 346 on board. U.S. aviation regulators in November cleared the best-selling planes to fly again, allowing Boeing to start delivering roughly 400 new jets it has produced at its Seattle-area facility but wasn’t able to hand over to customers. American Airlines, United Airlines, Alaska Airlines, Aeromexico and Brazil’s Gol are among the airlines that have received Max jets so far.
Deliveries are key for Boeing because it’s when airlines pay the bulk of the plane’s price.
Calhoun in April forecast that travel demand won’t return to 2019 levels for two to three years.