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3w ago

Boeing Reports Q2 Loss After $280 Million Air Force One Charge

Rising deliveries with $631 million in free cash flow show operational progress, plus Air Force One overruns and an FAA seat-inspection proposal raise cost and schedule risk.

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A proposed model of the new Boeing Air Force One, on a table in the Oval Office.
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Boeing unveiled new production capacity for the 737 MAX in Everett, Washington earlier this month

Overview

  • Boeing reported a larger-than-expected second-quarter net loss on Tuesday with adjusted loss per share of $0.76 and revenue of $24.56 billion while generating $631 million of free cash flow.
  • The company took a $280 million charge tied to the VC-25B Air Force One conversion work, which is a fixed-price 2018 contract now about four years behind schedule and more than $1 billion over budget.
  • That Air Force One charge pushed Boeing’s Defense, Space & Security segment to an operating loss of $15 million and reflects higher engineering and certification costs to meet a 2028 first-delivery target.
  • Commercial momentum continued as deliveries rose 14% to 171 jets in Q2, the 737 MAX accounted for the bulk of shipments, and Boeing moved production toward a roughly 47-per-month run rate.
  • Regulatory pressure adds near-term uncertainty: the FAA proposed inspections for possibly misinstalled seats on 453 U.S.-registered 737 MAX jets, and Boeing has reaffirmed full-year free cash flow guidance of $1 billion to $3 billion while pursuing multiple certification milestones.