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Boeing posts $4 billion loss tied to problems with 787 jet

Boeing, on Jan. 26, reported a $4.16 billion loss for the fourth quarter as the financial fallout of production flaws in one of its best-selling planes, the 787 Dreamliner, grew much worse.

The aircraft maker took a charge of $3.5 billion to cover additional delays in delivering copies of its 787 jetliner and compensation for airlines that are still waiting to get their planes.

The company said manufacturing problems with the 787 will add $2 billion in unusual production costs, double an earlier projection.

Boeing is coming off a year in which aircraft sales rebounded after a slump caused by the grounding of its 737 Max airliner and a pandemic that crippled air travel. The Chicago-based company still finished far behind European rival Airbus in delivering new planes last year, partly because of the 787.

The two-aisle 787 was grounded for more than three months in 2013 by overheating lithium-ion batteries. After design changes, the plane became a hit with both airlines, which appreciated its fuel economy on long flights, and travelers, who liked the bigger windows and more comfortable cabin.

Boeing halted deliveries, however, in late 2020 because of production flaws including gaps where panels of the carbon-composite fuselage are joined. Shortly after resuming deliveries, Boeing stopped them again in May 2021 as other problems emerged, including faulty titanium parts from a supplier, and the company has been unable so far to win Federal Aviation Administration approval for its fixes.

“The rework process is going well – it’s long, it’s disciplined, but it’s going well,” CEO David Calhoun told CNBC. “Our mechanics are learning a ton in the process.”

Boeing’s failure to resume deliveries is causing headaches for airline customers. Without the 787s that it expected to receive by now, American Airlines has dropped some international flights planned for next summer. American officials say Boeing has agreed to pay penalties for missing deadlines, and they say there could be negotiations over additional compensation if delays drag out much longer.

The 787 saga is unfolding just as Boeing tries to move past the grim early record of the 737 Max, which was grounded worldwide for nearly two years after two crashes that killed 346 people in all. Following a redesign that won FAA approval, Boeing delivered 245 Max jets last year, bringing in much-needed cash.

Separately, Boeing took a $402 million write-off for a refueling tanker that it makes for the U.S. Air Force. That charge pushed Boeing’s usually reliable defense and space business to a loss.

Boeing’s fourth-quarter loss compared with a loss of $8.44 billion during the same period a year earlier, when airlines had little appetite for new planes.

Excluding one-time charges, Boeing would have lost $7.69 per share – far worse than Wall Street expectations for a loss of 36 cents per share, according to a FactSet survey.

Revenue was $14.16 billion, down 3 percent from a year ago, also short of analysts’ forecast of $16.54 billion.

CEO Calhoun called 2021 a rebuilding year, and said in a note to staff that Boeing is “well positioned to accelerate our progress in 2022 and beyond.” He said the airline industry’s recovery from the pandemic has spurred demand for new planes, and he expressed optimism about the long-term prospects for the 787.

Boeing shares fell more than 2 percent Jan. 26.

Lockheed Martin’s fourth quarter earnings

Lockheed Martin on Jan. 25 reported fourth-quarter profit of $2.05 billion.

On a per-share basis, the Bethesda, Md.-based company said it had net income of $7.47. Earnings, adjusted for non-recurring gains, came to $7.24 per share.

The results surpassed Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of $7.23 per share.

The aerospace and defense company posted revenue of $17.73 billion in the period, also surpassing Street forecasts. Four analysts surveyed by Zacks expected $17.67 billion.

For the year, the company reported profit of $6.32 billion, or $22.76 per share. Revenue was reported as $67.04 billion.

Raytheon Technologies reports fourth quarter earnings

Raytheon Technologies Corporation on Jan. 25 reported fourth-quarter earnings of $686 million.

On a per-share basis, the Waltham, Mass.,-based company said it had net income of 46 cents. Earnings, adjusted for one-time gains and costs, came to $1.08 per share.

The results beat Wall Street expectations. The average estimate of five analysts surveyed by Zacks Investment Research was for earnings of $1.01 per share.

The an aerospace and defense company posted revenue of $17.04 billion in the period.

For the year, the company reported profit of $3.86 billion, or $2.56 per share. Revenue was reported as $64.39 billion.

Raytheon Technologies expects full-year earnings in the range of $4.60 to $4.80 per share, with revenue in the range of $68.5 billion to $69.5 billion.

General Dynamics reports fourth quarter earnings

General Dynamics on Jan. 26 reported fourth-quarter profit of $952 million.

On a per-share basis, the Reston, Va.,-based company said it had net income of $3.39.

The results topped Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of $3.37 per share.

The defense contractor posted revenue of $10.29 billion in the period, which missed Street forecasts. Three analysts surveyed by Zacks expected $10.7 billion.

For the year, the company reported profit of $3.26 billion, or $11.55 per share. Revenue was reported as $38.47 billion.

Oskosh reports fourth quarter earnings

Oshkosh Corp. on Jan. 26 reported fourth-quarter net income of $6.2 million.

The Oshkosh, Wisc.,-based company said it had net income of 9 cents per share.

The results did not meet Wall Street expectations. The average estimate of 10 analysts surveyed by Zacks Investment Research was for earnings of 19 cents per share.

The heavy vehicle manufacturer for the military, emergency and commercial companies posted revenue of $1.79 billion in the period, which topped Street forecasts. Eight analysts surveyed by Zacks expected $1.76 billion.

For the year, the company reported profit of $472.7 million, or $6.83 per share. Revenue was reported as $7.74 billion.

Oshkosh expects full-year earnings to be $5.75 to $6.75 per share, with revenue in the range of $8 billion to $8.5 billion.

Airbus revokes Qatar Airways A321 jet order amid dispute

European planemaker Airbus has terminated a multibillion dollar order by Qatar Airways for 50 of its single-aisle in-demand A321neo jets.

The termination of the contract for the A321neo, confirmed by the planemaker to The Associated Press on Friday, comes as Airbus and one of its biggest customers, Qatar Airways, are embroiled in a legal dispute over the grounding of the larger twin-aisle A350 plane.

In December, Qatar’s national carrier announced it was suing Airbus in London over what it described as the “accelerated surface degradation” of the wide-body A350. Qatar Airways said it had no choice but to ground a number of the jets, with 21 now out of operation.

The termination of the Airbus contract for its 321neos follows on the heels of Qatar Airways refusing to take any more A350s until the problem is fixed.

The state-owned airline will be relying on the long-haul A350 for the increased inflow of passengers to Qatar for the month-long FIFA 2022 World Cup, which will be played in the Arab Gulf state starting Nov. 21.

Qatar Airways has a fleet of 53 Airbus A350s in both its 1000 and 900 series. The airline has more on order with the France-based airplane manufacturer, making its total order of 76 A350s the most of any airline worldwide.

In a brief comment to the AP, Airbus confirmed that it did terminate a contract for 50 A321s ordered by Qatar Airways. The airline did not provide further details.

Qatar Airways did not immediately respond to requests for comment on the A321neo contract.

The cancellation of the order was first reported by Bloomberg.

In a public statement last year, Qatar Airways said it was left with no alternative but to seek a resolution through the courts to ensure that Airbus undertakes a thorough investigation of the full root cause of the degradation beneath the paint on the fuselage of the aircraft. Qatar Airways says otherwise it is not possible to establish whether any proposed repair solution will rectify the underlying condition.

Airbus had said it intends to vigorously defend its position as no other airline flying the A350 has grounded the aircraft due to safety concerns.

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