Air accidents take toll on Boeing earnings
New York, April 25 (IANS) The fatal Boeing 737 accidents in March and October have taken a toll on the US aeronautics giant with a 13 per cent drop in net earnings, the company announced on Wednesday.
There was a fall in earnings in the first quarter of the year, in which the company had allocated an additional billion dollars to the production costs of its controversial 737 MAX model, the Efe news reported.
The economic results were the first for Boeing since the international prohibitions of its 737 Max 8 and 9 after accidents in Indonesia and Ethiopia that caused 346 deaths.
Boeing announced net earnings of $2.15 billion, 13 per cent less than the $2.48 billion achieved in the first three months of 2018.
Core operating earnings fell by 21 per cent from $2.51 billion in 2018 to $1.99 in 2019.
Quarterly revenues also fell two per cent, from $23.38 billion recorded between January and March 2018 to $22.92 billion in the same period of 2019, as a result of the most serious crisis for Boeing in almost two decades.
These revenues were a little below the $22.98 billion estimated by analysts of the firm Refinitiv.
Boeing also reported that its net profit per share between last January and March was $3.75, 10 per cent less than the $4.15 obtained in the first three months of the previous year. A figure that did coincide with analysts’ expectations.
With the results announced, the company’s shares rose 1.2 per cent to $378.36 in the half session of Wall Street.
On March 1, its shares reached $440.62, but after the accident of the 737 MAX in Ethiopia on March 10 and the subsequent bans on flying these models, the values reached a minimum of $362.17 on March 22.
The company said that the results announced on Wednesday reflect the "lower deliveries of models 737" and that they were "partially compensated by a greater volume in (the sections) of defence and services".
Their Global Services also registered an increase, this time of 17 per cent, from $3.95 billion in 2018 to $4.62 in the first three months of 2019.
In the presentation of results, the company focused its efforts on launching reassuring messages about the evolution of the changes it is introducing in its 737 MAX ships to increase its security.
In a statement, it insisted that "Boeing is making steady progress on the road towards a final certification for a software update for the 737 MAX, with more than 135 test flights and production of the complete software update."
Boeing has acknowledged that in the two crashed 737 MAX aircraft, the MCAS navigation system was activated in response to "erroneous" information from the "angle of attack" sensor, and undertook not only to make safety improvements, but to give additional training for pilots.
"The company continues to work closely with international regulators and our partner airlines to thoroughly test the software and finalise a solid package of training and educational resources," the manufacturer said.
In line with these messages, the president of Boeing, Dennis Muilenburg, said in a statement that "throughout the company we are focused on security, on returning the 737 MAX to service and on winning and regain the trust of customers, the regulators and the people who fly."