Boeing Co. reported weaker second-quarter earnings that missed Wall Street expectations as its defense business weakened and it failed to deliver any of its Dreamliner 787 jets.
The giant aircraft maker reported a profit of $193 million on Wednesday, down 67% from last year’s second quarter, on a 2% decline in revenue.
Boeing received more money than in the first quarter deliver more aircraft than since the start of the pandemic, and sold more services to airlines and other aircraft operators.
Boeing, however, has been unable to deliver one of its best-selling planes, the 787, while regulators review steps the company is taking to fix production problems.
Boeing is also facing the threat of a strike On Monday, about 2,500 workers at three defense plants in Missouri and Illinois. The machinist union is demanding higher wages and pensions after it says Boeing stripped its pension plan.
CEO David Calhoun told CNBC that Boeing would continue talks with the union and that the strike would delay supplies to the Pentagon, though he did not elaborate.
Profits from Boeing’s normally steady defense business fell 10% in the second quarter from a year earlier, and the company took on costs totaling $240 million for an unmanned refueling aircraft being developed for the Navy and its Starliner spacecraft, which is for ferrying crews to the International Space Station.
A Boeing spokesman said the payment for the Starliner was unrelated to Tuesday’s announcement by a senior Russian space official that his country would exit the ISS program after 2024 and build its own orbital station.
Calhoun, who became CEO when Boeing’s financial situation worsened after two deadly Max planes, said the results showed “we are gaining momentum in our turnaround,” acknowledging that “it’s been a long road.”
In a memo to employees, Calhoun highlighted an increase in the number of 737 Max planes rolling off the assembly line at 31 per month, although that number could fluctuate. He also said Boeing was “in the final stages” of working with the Federal Aviation Administration to resume deliveries of the larger twin-body 787.
Net income in the second quarter was $160 million, but earnings attributable to shareholders were $193 million. That’s down from $587 million a year earlier.
Excluding pension plan expense adjustments and other special items, the company lost 37 cents per share. Analysts had expected an adjusted loss of 13 cents per share, according to FactSet.
Total revenue fell 2% to $16.68 billion, missing Wall Street’s forecast of $17.57 billion, despite an increase in airliner deliveries to 121 planes from 79 a year earlier. Boeing receives a significant portion of the purchase price on delivery.
Shares of Arlington, Va.-based Boeing rose 3% in morning trading on Wednesday.
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