Boeing posts third annual loss in a row as Dreamliner prices hit $5.5 billion

Boeing a major milestone in its year-long 737 Max crisis deliveries jump helped generate cash in the fourth quarter for the first time in almost three years.

But now the company is facing mounting spending on its 787 Dreamliner program, which on Wednesday revealed $5.5 billion in costs related to manufacturing defects that have prevented Boeing from making these new ones over the past 15 months Handing over jets to customers.

Shares of the company fell more than 5% in afternoon trade, more than the broader market.

The manufacturer took a pre-tax charge of $3.5 billion for the Dreamliner in the fourth quarter. It expects an additional $2 billion in costs after cutting production of the planes, double its previous estimate.

“We can’t rush it”

Boeing first disclosed the flaws – tiny, improper clearances on some fuselages – in 2020. Defects were also found in other parts of some aircraft, and Boeing had to inspect the undelivered jets.

“While I don’t like any of the allegations, the progress has been significant,” CEO Dave Calhoun told CNBC.screeching in the streeton Wednesday about the 787. He declined to say when he expects regulators to grant approval and deliveries to resume. “We can’t rush it.”

Boeing reported free cash flow of $494 million for the fourth quarter, up from an outflow of $4.27 billion a year earlier, a milestone Boeing executives previously said they wouldn’t hit until 2022. It was spurred by a surge in 737 Max deliveries last year after regulators lifted bans on the jets following fatal crashes in 2018 and 2019.

China

China, a key customer for Boeing and the first country to ground the Max after the second crash, the last month was approaching lift its ban in the planes.

CFO Brian West told analysts on the quarterly conference call that shipments to China could resume “as early as the first quarter” of 2022, which could help the company generate more cash.

Here’s how Boeing compared to analyst estimates prepared by Refinitiv:

  • Adjusted Results: A loss of $7.69 per share versus an expected loss of 42 cents per share.
  • Revenue: $14.79 billion versus $16.59 billion expected.

Boeing lost $4.29 billion last year, its third consecutive annual loss Covid pandemic and production problems continued to affect the bottom line. That’s an improvement from 2020, when the company had a loss of $11.94 billion.

For the fourth quarter, Boeing reported a net loss of $4.16 billion, less than half the $8.44 billion it lost a year earlier. Revenue fell 3% year over year to $14.79 billion, down from $16.59 billion that analysts had expected.

‘renovation year’

“2021 was an important recovery year for us, and together we overcame significant hurdles,” Calhoun said in a note to employees on Wednesday. “While we still have work to do, I am confident that we are well positioned to accelerate our progress in 2022 and beyond.”

Chicago-based Boeing aircraft sales and deliveries increased last year, but deliveries of new planes to airlines still lagged behind European rival Airbus. The US company said it has increased production of the 737 Max to 26 a month, closer to the 31 a month it expects this year and up from the 19 a month it released in its last quarterly report.

But Boeing has been paralyzed for months by halting deliveries of its 787 Dreamliners for much of the past year due to a series of manufacturing defects that have left customers baffled American Airlines and Hawaiian Airlines.

American Airlines said last month it would be cutting its international flight schedule over 787 delivery delays. The airline’s CFO, Derek Kerr, said in an earnings call last week that Boeing is already paying penalties for the delays and “will compensate us for the losses” if there are more delays.

More delays

Kerr had said American expects to start deliveries of the Dreamliner again in mid-April, a timeframe Boeing CEO Calhoun did not confirm on Wednesday. “All I’m saying is that customers know everything we do,” Calhoun said, adding that airlines and Boeing “share the same regulator.”

“The company continues to perform follow-up work on 787 aircraft in inventory and is in detailed discussions with the FAA on the actions needed to resume deliveries,” Boeing said in a earnings release. “In the fourth quarter, the Company determined that these activities will take longer than previously anticipated, which will result in further delays in customer delivery dates and related customer considerations.”

CFO West referred to labor, material and supply chain shortages as “observation posts.”

Boeing’s large fleet of aircraft — 335 Max jets expected to be delivered by the end of 2023 — will provide a buffer, Calhoun said.

“When I think about the supply chain constraints that are out there, I hate that we got here this way, but having a stock of finished aircraft, particularly in relation to the Max, is at this moment beneficial,” Calhoun told CNBC.

recovery from travel

Calhoun said he expects the worst is behind the aviation sector after the pandemic crushed demand for air travel and new planes. Airline executives said in early January they expect international travel bookings to rebound this spring and summer after entry restrictions were lifted in recent months.

The company reiterated on Wednesday that it expects passenger traffic to return to 2019 levels next year or 2024.

Suppliers to Boeing and Airbus General Electric on Tuesday forecast a 20% increase in sales this year at its main aerospace division, which manufactures and repairs aircraft engines.

However, the recovery was bumpy. airlines incl delta, United and American earlier this month predicted the rapid spread of the Omicron variant, which began late last year delay a rebound travel demand by about two months. Executives at those airlines said they expect a strong spring and summer travel season.

On Tuesday, the Transportation Security Administration screened 1.06 million people, the fewest since April 2021.

GoDaddy, Boeing, Moderna and extra

GoDaddy logo

SOPA pictures | LightRakete | Getty Images

Check out the companies that are making headlines in midday trading.

Go Daddy The web hosting company’s shares rose 8.4% after the Wall Street Journal reported that activist investor Starboard Value acquired a 6.5% stake worth approximately $ 800 million.

Delta Airlines – Airlines’ shares fell but bounced back from their lows the following Monday Thousands of flights canceled over the holiday weekend in the midst of staff shortages. Delta was down 0.8%, United was down 0.7%, and American Airlines shares were also trading 0.5% lower. More than 2,000 flights were canceled from Christmas Eve to Sunday evening. The airlines cited the spread of the Omicron Covid variant among the crews as the reason for the cancellations, with bad weather also having an impact on the flights.

Norwegian Cruise Line, royal caribbean – Cruise ship stocks also fell after Covid. was reported Outbreaks on ships. Royal Caribbean lost 1.4%. Carnival was down 1.2%, and Norwegian Cruise Line down by 2.6%.

Las Vegas Sands, MGM resorts Casino operator stocks were sold at the same time as the Omicron variant dampened demand for travel and leisure. Las Vegas Sands lost 1.9%. Wynn Resorts lost 1.5% and MGM Resorts lost 1.2%.

APA Corp., Devonian energy – Energy stocks rose as oil prices rose. APA Corp was up 7.3%, Devon Energy was up 6.1% and Diamondback Energy was up 4.9%.

Modern – Moderna shares gave up after Financial Times reports The drug maker is fighting a shareholder proposal that the company should open up its vaccine technology to poorer countries. The proposal calls on Moderna to explain why its prices are so high given the amount of government financial support it has received.

Didi Global – The shares of Chinese rideshare company Didi fell 5.4% after the Financial Times reported that Didi has been preventing employees from selling company shares for an indefinite period of time. This follows a move by the company earlier this month delist the stock in the United States.

Ralph Lauren, american eagle – Retail stocks rose Monday after early Christmas shopping sales were shown heavy consumption in recent weeks. Ralph Lauren’s shares rose 4.3% while American Eagle’s shares rose 3.5%

– CNBC’s Jesse Pound, Tanaya Macheel, Pippa Stevens and Yun Li contributed to the coverage

CVS, Lucid, Southwest Airways, Boeing, GameStop and extra

People walk past a CVS pharmacy store in the Manhattan neighborhood of New York City.

Shannon Stapleton | Reuters

Check out the companies that are making headlines in midday trading.

CVS The drugstore chain’s shares rose 3.8%, hitting a 52-week high, after the company said Sales will accelerate in the coming year. CVS will introduce new health services and pool its drugstore and insurance businesses.

Hormel foods – Hormel’s shares rose 5.7% after the food maker beat quarterly earnings estimates. The company posted earnings of 51 cents per share for the quarter, one cent above Refinitiv’s consensus forecast. Sales also exceeded Wall Street’s expectations.

RH Home furnishings retailer RH rose 9.6% after reporting above-average profits and revenues that exceeded forecasts. The company also raised the lower end of its sales forecast. Guggenheim also reiterated the share as the best idea say the “catalyst path remains intact”.

Rent the runway – Shares in the fashion rental platform fell by 3.5% in midday trading Losses widened in the third quartereven though sales are up 66% year over year. Amid investor concerns, Rent the Runway has not yet made a profit and the number of active subscribers has not recovered to pre-pandemic levels.

GameStop – The video game retailer saw shares fall more than 6% after the company reported losses that widened in the third fiscal quarter. The company announced that its net loss rose to $ 105.4 million, or $ 1.39 per share, from a loss of $ 18.8 million, or 29 cents per share, last year. The stock, which was once at the center of the meme stock mania, is still up more than 760% this year.

Clear group The electric vehicle startup’s shares rose more than 12% a day after the company announced a proposal $ 1.75 billion convertible bond. Lucid also recently announced that it has a Subpoena from the Securities and Exchange Commission “Requirement for certain documents to be presented in connection with an investigation.”

American Airlines, Boeing American Airlines shares were down nearly 1% after the company said it was Reduction of the flight plan next summer, because it is waiting for Boeing to deliver its 787 Dreamliners. Boeing also plans to compensate the airline. Boeing’s shares plummeted 1.7%.

Southwest Airlines – Southwest stocks fell. more than 3% after Jefferies has downgraded the airline’s stock, citing the persistent inflation that weighs on profitability. Jefferies lowered his rating on Southwest to keep buying and also cut his price target on the stock from $ 60 per share to $ 45 per share.

EVgo – EVgo shares rose 7.1% JPMorgan initiated reporting of the operator of fast charging services for overweight electric vehicles. “We expect the company to achieve above-average sales growth through rapidly increasing fleet acceptance and higher utilization,” noted JPMorgan.

Pfizer – Pfizer shares gained 2% Wells Fargo has started reporting of the stock with an overweight rating. The company said Pfizer’s Covid treatments were in place and could continue to grow the company’s sales in the years to come.

Sun run, Sunnova Solar company stocks plummeted despite JPMorgan naming stocks the top picks for the next year. Sunrun lost 3.8% while Sunnova lost 1.7%.

Solid strength – Shares in battery cell maker Solid Power for electric vehicles rose 6.4% at noon. The enterprise debuted on the Nasdaq Thursday morning after completing a transaction with a special acquisition company. Solid Power’s investors include Ford and BMW.

– CNBC’s Yun Li, Maggie Fitzgerald and Tanaya Macheel contributed to the coverage.

Boeing (BA) 3Q 2021 loss as Dreamliner flaws drive up prices

An employee works on the tail of a Boeing Co. Dreamliner 787 aircraft on the production line at the company’s final assembly facility in North Charleston, South Carolina.

Travis Dove | Bloomberg | Getty Images

Boeing said Wednesday that defects in its 787 Dreamliners would result in abnormal costs of $ 1 billion and that production would be reduced to about two of the planes per month as it struggles to address quality issues. These issues resulted in deliveries being suspended for most of the past year.

Of this, the manufacturer wrote off $ 183 million in the third quarter.

However, sales improved thanks to higher Aircraft sales and supplies. Boeing said its revenue rose to $ 15.28 billion in the third quarter, an 8% increase from $ 14.14 billion last year. That was below the $ 16.3 billion forecast by analysts. The company reported a net loss of $ 132 million for the quarter, despite being less than the $ 466 million it lost a year earlier.

“Our commercial market is showing improved signs of recovery with the opening up of vaccine distribution and border protocols,” said CEO Dave Calhoun in an employee statement following the results. “When demand returns, supply chain capacity and world trade will be the main drivers of our industry and the recovery of the world economy.”

Boeing’s cash flow from operations improved to minus $ 232 million from $ 4.8 billion a year ago. The company’s share rose 1.4% in pre-market trading.

This is how the company has developed compared to the analyst estimates carried out by Refinitiv:

  • Adjusted results: A loss of 60 cents per share versus an expected loss of 20 cents per share.
  • Revenue: $ 15.28 billion versus $ 16.3 billion, expected.

Last year, Boeing first disclosed quality problems with seams on the hulls of some of its 787s. The problems led to inspections that caused Boeing to suspend deliveries of the aircraft to airline customers, thereby draining the company’s cash.

Deliveries resumed briefly this year, but were suspended again in May due to further inspections. Analysts estimate that Boeing has around 100 of the aircraft in its fleet. The company has repeatedly lowered the production rate for the jetliners. Over the summer, Boeing announced it was producing fewer than five 787s a month.

“The company expects to continue at this rate until deliveries resume and then return to five per month over time,” the statement said.

Boeing has been in successive crises since the first of two fatal crashes of its 737 Max three years ago. While it was a 20-month aircraft lockdown, the pandemic decimated the demand for travel and airplanes.

The company shipped 62,737 in the quarter, the most since Q1 2019, Calhoun said. It manufactures 19 Max aircraft per month, up from 16 in July. The forecast was to increase production to 31 per month in early 2022.

The company’s shares had lost 2% so far this year as of Tuesday’s close of trading, compared to a 22% gain for the S&P 500.

Boeing executives will face analyst questions on Wednesday at 10:30 a.m. ET.

Shares making the largest strikes noon: Pfizer, Moderna, Boeing, extra

A Boeing 737 MAX 10 airliner stops while taxiing on the airline.

Stephen Brashear | Getty Images

Check out the companies that are making the headlines in midday trading.

Boeing – Boeing shares rose 3.2% after Virgin Orbit, a satellite launch spin-off from Sir Richard Branson’s Virgin Galactic, announced that it will go public at a valuation of $ 3.7 billion. Boeing will invest in the deal’s private investment in a public equity round. Virgin Orbit partners with a special purpose vehicle NextGen Acquisition Corp. II, which was up 1.9% on its shares after the news.

Pfizer, BioNTech – Drug manufacturers’ stocks rose Monday after the Food and Drug Administration full consent given to the Pfizer and BioNTech Covid-19 vaccine – first in the US to receive the coveted award. Pfizer’s shares rose 2.5% and BioNTech rose 9.6%. Shares in Modern rose 7.6% in the hope that approval paves the way for own approval.

General Motors – The automaker’s shares ticked 1.3% lower after General Motors’ Recall of his electric car Chevy Bolt on Friday. It will include newer models, a move that will cost the automaker an additional $ 1 billion. The recall addresses an issue that can increase the risk of battery fire.

Occidental Petroleum, Devonian energy – Energy stocks rebounded Oil prices rose on Monday, with a seven-day losing streak, the longest in crude oil since 2019. Occidental Petroleum rose 6.9%, Devon Energy rose 6.1%. Diamondback energy 5.9% increased and Marathon oil 5.4% up.

Robin Hood Robinhood stock rose 6.2% despite Wall Street analysts pessimistic on newly listed brokerage stocks. Many Cover initiated by investment firms was rated neutral or equal by Robinhood on Monday, and the stock was even given a rare underweight to JPMorgan’s Kenneth Worthington.

Didi Global – Chinese ride-hailing app shares rose 3.4% despite Beijing’s investigation into the company. The Financial Times reported Didi could be forced to sell shares with special rights to the Chinese government and the company could be asked to cut commissions from drivers.

Tesla – Tesla shares rose 3.8% after Deutsche Bank reiterated its purchase rating at the electric vehicle manufacturer. The company said Tesla’s Artificial Intelligence Day last week set out a “bold vision” and analysts “came with greater appreciation for it Tesla ‘s efforts on AI. “

Abercrombie & Fitch The apparel retail stock rose 2.3% after Tesley confirmed its outperformance rating from Abercrombie & Fitch and expected “margin widening”. The company plans to publish the results this week.

– CNBC’s Maggie Fitzgerald and Yun Li contributed to the coverage

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Boeing names former GE government Brian West as new chief monetary officer

A Boeing 737 MAX 10 airliner stops taxiing on the airline.

Stephen Brashear | Getty Images

Boeing named Brian West, a former executive at General electricsAviation as the new CFO after the current CFO announced his resignation earlier this year.

West will be tasked with leading Boeing out of the coronavirus crisis that is making the aircraft manufacturer one Record loss in 2020.

He replaces Greg Smith, who is retiring this month after serving since 2011. The company announced Smith’s resignation in April.

West is CFO of Refinitiv and was CFO of Nielsen. Boeing CEO Dave Calhoun is also one former GE manager and former CEO of Nielsen.

“I have had the pleasure of working with Brian before and he is an exceptional leader whose extensive operational expertise and commitment to stakeholder transparency will fuel our efforts while we continue to focus on safety and quality, our performance improve and transform our company. ” Future, “Calhoun said in a press release.

West begins his new role on August 27th.

Early on Wednesday, Boeing announced that Stayce Harris, a retired Air Force Lieutenant General, had been elected United Airlines Pilot with three decades of experience on the board. Boeing said she will serve on the aerospace safety and review committees.

“Boeing will benefit from General Harris’ extensive aerospace experience gained through decades of commercial aviation and a distinguished military career,” said David Calhoun.

She is the first black woman on the Boeing board of directors.

Cramer’s Mad Cash Recap: Boeing, Intellia, Tesla

You might think “coolness-per-share” is a frivolous way of valuing stocks, but today’s marketplace is exactly what investors are looking for, Jim Cramer told his Mad Money viewers on Monday.

Cramer said Monday’s action was all about making money out of the old and buying up everything new, especially when it’s cool.

As a result, investors sold the oil field as fossil fuel and climate change concerns ravage the sector. Shareholders also sold Boeing (BA) – Get the report after delays with the 777x, it became the latest in a host of problems plaguing aircraft manufacturers.

Investors also worried about the latest variants of COVID and whether the current vaccines would remain effective. Travel has been particularly hard hit with Marriott (TO DAMAGE) – Get the report lose 3% until the end.

What are investors buying cool? Look no further than Intellia gene therapy (NOW) – Get the report shoots 50% on positive news from clinical trials. That sent shares in Edits Medical (TO EDIT) – Get the report also higher. Investors are also rediscovering Tesla (TSLA) – Get the report, together with PayPal (PYPL) – Get the report and Nvidia (NVDA) – Get the report, which is up 5% on news of the acquisition of ARM Holdings (ARMH) could actually happen.

Cramer and the AAP team are reviewing everything from revenue to politics to the Federal Reserve. Find out what they are saying to their investment club members and join the fun with a free trial subscription to Action Alerts Plus.

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To watch reruns of Cramer’s video segments, visit Mad Money page on CNBC.

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At the time of publication, Cramer’s Action Alerts PLUS held a position with PYPL, NVDA.

Boeing raises necessary retirement age for CEO Calhoun by 5 years, CFO to retire

Dave Calhoun, Boeing Chairman

Adam Jeffery | CNBC

Boeing It was announced on Tuesday that the mandatory retirement age of the 64-year-old CEO will be raised from 65 to 70 as the company continues to face challenges from the coronavirus pandemic, production problems and the aftermath of two crashes on its best-selling plane.

Boeing CFO Greg Smith will retire in July, the manufacturer said. Boeing said it was looking for a replacement.

“Under Dave’s strong leadership, Boeing has effectively mastered one of the most challenging and complex periods in its long history,” said Larry Kellner, Boeing chairman, in a press release. “Given the significant progress that Boeing has made under Dave’s leadership and the continuity required to thrive in our long cycle industry, the Board of Directors has determined that it is in the best interests of the company and its stakeholders to the board of directors and Dave allow the flexibility for him to continue in his role beyond the company’s normal retirement age. “

This is the latest news. Check for updates again.

FAA orders inspections of Boeing 777s after engine failure on United flight

Residents take photos of debris that fell from the engine of a United Airlines aircraft in the Broomfield neighborhood outside of Denver, Colorado on February 20, 2021. A United Airlines flight suffered a fiery engine failure shortly after taking off from Denver on Feb. 20 en route to Hawaii, where massive debris is falling on a residential area before a safe emergency landing, officials said.

Chet Strange | AFP | Getty Images

United Airlines said Sunday that it will temporarily remove 24 of its Boeing 777s out of service after one of the aircraft suffered an Engine failure over the weekend, which resulted in an emergency landing.

The head of the Federal Aviation Administration announced on Sunday that the agency would order the inspection of some Boeing 777 jetliners powered by the same Pratt and Whitney engine, the PW4000.

The Japanese aviation authority has ordered airlines to suspend flights from aircraft with this type of engine until further notice, according to the FAA. United is the only US airline with this type of engine in its fleet, the agency added.

United Flight 328 landed at Denver International Airport shortly after take-off on Saturday afternoon after the right engine failed. No one was injured on board, but debris, including what appeared to be the large engine cover, fell nearby.

The National Transportation Safety Board and the FAA are investigating the incident.

“We checked all available safety data after yesterday’s incident. Based on the initial information, we concluded that the inspection interval for the hollow fan blades, which applies only to this engine model, which is only used in Boeing 777 aircraft, has been extended should be, “FAA Administrator Steve Dickson said in a statement.

United has another 28 of these aircraft in its fleet that are currently in storage. Airlines parked or retired dozens of planes after demand plummeted due to the Covid-19 pandemic.

Engine maker Pratt and Whitney, a Raytheon Technologies Unit, did not immediately respond to a request for comment.

United Boeing 777 suffers engine failure after takeoff from Denver, particles discovered however no accidents

A United Airlines plane

Nicolas Economou | NurPhoto | Getty Images

ON United Airlines Boeing The 777-200 heading for Honolulu suffered an engine failure shortly after taking off from Denver on Saturday, the Federal Aviation Administration said.

The plane returned to Denver, where it landed safely. Pictures shared on social media showed what appeared to be part of the engine cover outside a house while police shared pictures of other debris. United said no injuries were reported on board the flight.

“The FAA is aware of reports of debris near the aircraft’s flight path,” the agency said in a statement.

The plane left Denver International Airport shortly after 1:00 p.m. mountain time and returned to the airport less than 30 minutes later, according to flight tracking site Flightradar24.

The National Transportation Safety Board and the FAA said they are investigating the incident. The Broomfield Police Department in Colorado said the plane dropped debris in several neighborhoods and warned not to touch or move any part of the plane.

United Flight 328, a twin-engine wide-body Boeing 777, was carrying 231 passengers and 10 crew when the right engine failed, United said.

United said it is in contact with the FAA, NTSB as well as local law enforcement agencies about the flight.

“All passengers and crew were dropped off and transported back to the terminal,” United said in a statement in Denver. The airline said most of the passengers on the flight had been rebooked and en route to Honolulu on a different flight, while those who did not want to be rebooked on Saturday were given hotel stays.

“Extremely infrequent engine failures like this prove that there is no substitute for experience and that the most important aircraft safety system is two well-trained, highly skilled, professional pilots working on the controls on the flight deck,” said the Air Line Pilots Association union, which runs the Representing United pilots.

The Association of Flight Attendants-CWA, which represents United cabin crews, said its staff support and safety committees provide assistance to the crews.

“We are grateful that the plane landed safely,” said the union.

Boeing said it had received reports of the incident. Flightradar24 said the plane was powered by two Pratt and Whitney PW4000 engines. The Raytheon Technologies The device did not immediately respond to a request for comment.