Even after the 737 MAX gets cleared for takeoff, the plane maker will have a hard time delivering it to customers
It seemed difficult to imagine a worse year for Boeing BA 2.80% than 2019—until 2020 came along. What should worry investors now is that the long-awaited 2021 return to grace is slipping away.
On Wednesday, the Chicago-based plane maker reported a $466 million loss for the third quarter. Revenues came in 29% lower due to the Covid-19 crisis, even though the prior-year period was itself badly hit by the grounding of Boeing’s 737 MAX jet in March 2019. However atrocious, the results were better than analysts were expecting: Boeing stock fell about 3% in afternoon trading, in line with the broader equity market’s poor performance Wednesday.
Like other companies in the aerospace industry, Boeing is taking steps to cut costs to face years of depressed travel demand. It is closing the original 787 Dreamliner assembly line in the Seattle area; the model will only be made in the lower-cost South Carolina plant from mid-2021. And Chief Executive David Calhoun wrote to employees Wednesday that a further 11,000 jobs will be cut by the end of 2021. He also plans to get rid of 30% of office space, echoing what peers such as Raytheon have said.
Excerpt from WSJ
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