Boeing Posts 3Q Loss, Plans More Job Cuts

Marco Green
October 28, 2020

Total company revenue declined 29 percent to $14.1 billion in the third quarter.

BA reported a third-quarter loss of $1.39 per share, vs. $2.52 a share expected.

The pandemic has caused a huge drop in air travel, pushing major airlines to the brink of bankruptcy and forcing them to cut staff.

The plans came as the US aerospace giant on Wednesday reported a third-quarter loss of $466 million and said it is focused on preserving cash ahead of the expected return to service of the 737 MAX as soon as next month, ending a protracted world-wide grounding after two crashes took 346 lives. In the first nine months of the year, it has delivered only 98 airline planes, compared with 301 during the same stretch of 2019.

As the company resizes its operations to align with market realities, Boeing expects to continue lowering overall staffing levels through natural attrition, as well as voluntary and involuntary workforce reductions, the quarterly report said. Analysts expected a loss of $2.33 per share, according to a survey by Zacks Investment Research. The headcount at that time will be around 130,000, down from 160,000 in January of this year.

The US plane maker also said it was sticking with the deeply reduced twin-aisle production rates announced in July, as well as the goal to hit a build rate of 31 narrow bodies monthly in early 2022. Deliveries through September 30 reached 98 percent, including two 777Fs to China Southern Airlines and two 737 planes to China Eastern Airlines.

Once a prodigious cash generator, Boeing is now carefully monitoring its liquidity and soaring debt while navigating an unprecedented drop in air travel and working with regulators to lift the Max's grounding. However, Boeing officials said it could reduce output further if airlines are unable to take delivery because of a lack of demand or financing.

This article was corrected at 08:43 a.m. ET because the original incorrectly said that the company was moving all assembly of the jet to North Carolina.

"With the 737 MAX inching closer to return to service around year-end, we do not expect Boeing to back away from targets for positive free cash flow in 2021 and delivering more than 50 per cent of the 737 MAXs in inventory", JP Morgan analyst Seth Seifman said. The aircraft has been grounded for over a year, after two fatal crashes less than six months apart in Indonesia and Ethiopia killed 346 people.

Other reports by Click Lancashire

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