Boeing Post Annual Loss; 737 Max Grounding Costs Almost $19B

By Peter Nurse

Investing.com – The full cost for Boeing (NYSE:) due to the grounding of its best selling plane, the 737 Max, was laid bare in its fourth quarterly results Wednesday, with the company posting its first annual loss in more than two decades.

Boeing (NYSE:) announced a loss per share of $2.33 in the fourth quarter, on revenue of $17.91 billion, a drop of 37%. Analysts polled by Investing.com anticipated earnings per share of $0.6 on revenue of $21.65 billion. The company also detailed the costs associated with the grounding of the series, taking a total charge of $18.6 billion. This resulted in an annual net loss of $3.47 a share, the first since 1997.

Boeing (NYSE:) shares bounced after early losses. At 08:10 AM ET (1310 GMT) the shares stood 2.5% higher at $324, still quite a bit lower than its 52 week high of $446.01 set on March 1, 2019, just before the second fatal crash involving the 737 MAX.

“We recognize we have a lot of work to do,” said Boeing (NYSE:) President and Chief Executive Officer David Calhoun. “We are focused on returning the 737 MAX to service safely and restoring the long-standing trust that the Boeing brand represents with the flying public.”

Calhoun took the helm earlier this month after previous chief Dennis Mullenburg was ousted for his handling of the Max crisis late last year.

And while these figures are horrendous, there could be more to come.

“We don’t think Boeing (NYSE:) can reach full operational normalcy in the near-term — and one of the main impediments in this process is regaining public trust,” said Haris Anwar, an analyst at Investing,com “Boeing is certainly capable of solving the technical issues required to make the MAX a viable revenue generator again, but that process is also closely tied with winning back public confidence.”

The 737 MAX series has been grounded since March following two fatal crashes. The company is suggesting a return to service in the summer, but has already been forced more than once to push back its timeline after a series of embarrassing disclosures about how it treated regulatory approval process in the past.

Boeing follows other major Capital Goods sector earnings this month

Boeing’s report follows an earnings beat by United Technologies on Tuesday, who reported EPS of $1.94 on revenue of $19.55B, compared to forecasts EPS of $1.84 on revenue of $19.4B.

ASML ADR had missed expectations on January 22 with fourth quarter EPS of $2.99 on revenue of $4.47B, compared to forecast for EPS of $3.01 on revenue of $4.35B.

Stay up-to-date on all of the upcoming earnings reports by visiting Investing.com’s earnings calendar

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