Boeing Co (NYSE: BA) said Wednesday its first quarter costs rose USD 1 Billion due to the worldwide grounding of its 737 MAX plane, whose software is suspected in two deadly crashes. The Company is withdrawing its previous full-year 2019 financial forecast while it navigates issues surrounding the jet. New guidance will be issued at a later date, said Boeing.
The Company delivered first-quarter earnings that met Wall Street’s expectations, while revenue fells short. Earnings per share fell 13% to USD 3.16 from USD 3.64 the year prior. Revenue dropped 2% to USD 22.9 Billion after surging to a record high the previous quarter. Analysts expected revenue of USD 22.98 Billion. Sales fell 9% in Boeing’s commercial airplane division as the Company delivered fewer 737 airliners. It delivered 149 commercial airplanes this quarter, down from 184 a year before.
"Across the company, we are focused on safety, returning the 737 MAX to service, and earning and re-earning the trust and confidence of customers, regulators and the flying public," said Boeing Chairman, President and Chief Executive Officer Dennis Muilenburg.
The 737 MAX fleet remains grounded following the Lion Air and Ethiopian Airlines crashes. Industry experts say the aircraft may not return to service until October. According to analysts, each full month the aircraft remains grounded will add another USD 1.5 Billion to USD 1.75 Billion in lost cash flow.
Boeing is still building the MAX at its plant in Renton, Washington at a reduced rate of 42 a month, down from 52 before crashes.