Boeing reports Q3 loss as 787, Starliner woes drag down results

New York (AFP) – Boeing's troubles with the 787 plane and a delayed NASA test launch dragged on its third quarter, resulting in another loss Wednesday as the aviation giant tries to fully recover from earlier stumbles.


The company, which reported a profit in the second quarter after six straight losses, wound up back in the red in the latest period ending September 30 with a loss $109 million.

Major drivers were expenses tied to the 787 problems and one-time costs associated with the delayed test flight of the unmanned CST-100 Starliner capsule.

Those problems are the latest headwinds facing Boeing, which navigated an existential crisis in early 2020 when the downturn in aviation due to Covid-19 added to the hit from the lengthy 737 MAX grounding.

Chief Executive David Calhoun told CNBC he was an "optimist," adding that he aims to enter 2022 "with a decent trajectory" as the aviation industry recovery accelerates.

Calhoun said he is following a "deliberate process" in interfacing with the Federal Aviation Administration (FAA) over the 787, likening the back-and-forth to the experience with the 737 MAX, which the FAA cleared to fly in November 2020 following a 20-month grounding after two fatal crashes.

Revenues rose eight percent to $15.3 billion, reflecting the benefit from returning deliveries of the 737 MAX.

Avoiding forecasts

On Wednesday, Boeing announced $1 billion in new expenses connected with the 787 Dreamliner, with $183 million coming in the third quarter.

Boeing halted deliveries of the 787 in May following a series of issues with the plane.

Earlier this month, the company said it would rework undelivered 787s after being notified by a supplier that some parts were not manufactured properly.

It is currently manufacturing just two 787 planes per month.

Calhoun said the dialogue with the FAA on the 787 is "the mirror image of the MAX," noting that Boeing had frustrated investors repeatedly by offering an overly-optimistic timeframe for returning the plane to service.

"So the good news is the proof points are that the MAX is out there, it is flying like crazy. And it is as reliable as any airplane in any fleet in the world," Calhoun told CNBC.

"I can't predict delivery times... we are going to stick to our knitting."

A second charge of $185 million connected to the delayed test flight of the Starliner capsule also hit results.

The CST-100 had been scheduled to fly to the International Space Station (ISS) from Cape Canaveral, Florida, on August 3 but the flight was aborted just hours before launch because of problems with propulsion system valves.

Boeing officials told reporters earlier this month that they were still conducting testing and hoped to conduct the trial flight in the first half of 2022.

NASA gave both Boeing and SpaceX multi-billion dollar contracts to provide its astronauts with taxi services to the space station and end US reliance on Russian rockets for the journey.

Boeing's program is lagging and the aborted Starliner launch was a setback for the company. Boeing needs to complete a successful uncrewed mission before it can carry astronauts.

Shares dipped 0.3 percent to $209.22 in early trading.