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Boeing reports first quarterly loss since 2009

Published 27/07/2016

Boeing slumped to a 234 million US dollar (£178 million) loss in the second quarter
Boeing slumped to a 234 million US dollar (£178 million) loss in the second quarter

Aerospace giant Boeing has plunged to its first quarterly loss in nearly seven years following a string of hefty charges.

The Chicago-based firm slumped to a 234 million US dollar (£178 million) loss in the second quarter, as it faced write-downs totalling 3 billion dollars (£2.3 billion) linked to two of its newest commercial jets and a military fuel tanker.

It last posted quarterly losses in the third quarter of 2009.

However, revenues rose 1% to 24.8 billion dollars (£18.9 billion) in the period thanks to "strong commercial deliveries and services growth".

The announcement comes as Malaysia Airlines agreed to buy up to 50 Boeing Max planes in a 2.75 billion dollar (£2.1 billion) deal.

Dennis Muilenburg, chief executive of Boeing, said: "The underlying operating performance of the company remains solid with our commercial and defence teams again delivering strong revenues and operating cash flow.

"Actions taken during the quarter that impacted our earnings were the right, proactive steps to reduce risk and strengthen our position for the future."

He added: "As we look forward to the second half of the year, we anticipate continued strong operating performance across our production and services programmes on generally healthy demand for our broad portfolio of market-leading offerings."

The charges include a 1.2 billion dollar (£913 million) write-down before taxes on its 747-8 aeroplane due to weakness in the air cargo market.

It took a second hit after deciding not to spend money refurbishing and selling two 787 Dreamliner test aircraft, while it was also dealt a blow on the Air Force's KC-46 Pegasus Tanker after problems were found during test flights.

The second-quarter update comes after one of Boeing's key suppliers, Rockwell Collins, said the firm was behind on 30 million to 40 million dollars (£23 million to £30 million) in bills for electronic and cockpit equipment.

Elsewhere, France-based Airbus Group reported a profit of 1.76 billion euro (£1.5 billion), up from 1.52 billion euro (£1.3 billion) in the first half of 2015, despite suffering a 1.4 billion euro (£1.2 billion) blow from issues with its A400M military transporter and A350 passenger jet.

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