Boeing reveals its first annual loss since 1997 amidst the ongoing 737 Max crisis

Boeing has a reputation of not posting an annual loss in over two decades. The largest American airplane manufacturer had its streak broken in its Wednesday report as it revealed the specifics of its annual loss in 2019. The loss was attributed to the sharply rising costs associated with the ongoing 737 Max complications with the manufacturer expecting a rough terrain ahead as its bestseller, fuel-efficient jetliner remains grounded after the two fatal crashes that killed 346 people.

737 Max Is Likely To Remain Grounded Through Summer 2020

Boeing highlighted a massive loss of $636 million last year that marked the first for the planemaker since 1997. Boeing had boasted a huge annual profit of $10.46 billion in 2018. Following the recent FAA (Federal Aviation Administration) statement that expected the 737 Max to remain grounded through the travel intensive summer period in 2020, Boeing has temporarily suspended the production of the jetliner in January.

Ever since the second tragedy in March 2019, Boeing is committed to regaining the confidence of the regulators as well as that of the public in an attempt to bring its most popular series back for commercial flights. The outcome so far, however, hasn’t been kind to the American plane manufacturer.

The costs associated with the 737 Max complications, as per the company, have crossed the $18 billion mark. Such costs were reported at around 50% lower in the previous quarter. The figure also accounts for $2.16 billion in additional pretax charge incurred on Boeing to compensate its 737 Max customers (airlines etc.) following the jetliner’s grounding in March. In the second quarter, the pretax charge was recorded at $5.6 billion.

Boeing Climbed 1.7% Despite The Poor Performance Results

With annual sales dropping to the worst in decades for Boeing, it recently lost its long-held title of the world’s largest airplane manufacturer to its staunch European rival, Airbus. As per the Q4 earnings report, Boeing announced $2.33 of loss per share as compared to a significantly higher $5.48 of adjusted earnings per share in the same quarter last year. On revenue’s front, the company noted $17.91 billion in the fourth quarter that marked a massive 37% decline as compared to last year’s $28.34 billion.

Amidst the grim outlook, however, Boeing climbed 1.7% in the stock market in extended trading on Wednesday. As per the analysts, investors were wary of the costs being even higher in the fourth quarter. Investors may also have appreciated the company’s clarity in terms of announcing cost projections, experts added.