SEATTLE — Boeing posted a bigger third-quarter loss than expected on Tuesday, as supply-chain challenges and production delays in its commercial airplane division overshadowed stronger margins across the rest of the company.
Shares of the U.S. planemaker fell 2.5 per cent in premarket trading even as Boeing continues to recover from years of crises and controversies that dented its reputation, drained cash and saddled it with a heavy debt load.
During the quarter, Boeing secured certification for the 737 MAX 7 from U.S. regulators, won the U.S. Navy’s sixth-generation F/A-XX fighter contract and generated free cash flow for another quarter, while certification of the larger MAX 10 followed in October.
“Expectations are rising, and they should. We have a stronger foundation than a year ago, but we also have more work to do to deliver on our backlog, strengthen our culture, and improve how we work every day,” CEO Kelly Ortberg said in a memo to employees after the results.
Boeing reported an adjusted loss of 34 cents per share for the quarter through September, compared with market expectation of 21 cents, according to data compiled by LSEG.
Revenue at Boeing Commercial Airplanes dipped slightly to US$10.7 billion, while operating loss stood at $697 million and margin shrank by just 6.5 per cent compared with a contraction of 48.3 per cent a year ago.
The company attributed the performance to less profitable jetliner deliveries and higher production costs, including from its supply chain.
Boeing has struggled to increase 737 output from 42 jets a month to 47, which it hoped to hit during the summer. It has not been able to make wings fast enough, CEO Kelly Ortberg said at an industrial conference in September.
At Boeing’s defense division, higher deliveries, improved operational performance and a $252-million sale of a subsidiary contributed to nearly $500 million in quarterly earnings with an operating margin of 6.2 per cent, up from 1.7 per cent a year ago.
Boeing Global Services earned $1 billion and posted an operating margin of 18.3 per cent.
The U.S. planemaker ended the quarter with $25.2 billion in net debt, down slightly from $25.9 billion in the previous three months and $30.4 billion a year ago.
(Reporting by Dan Catchpole in Seattle and Shivansh Tiwary in Bengaluru; Editing by Lincoln Feast and Arun Koyyur)
