Boeing misses third-quarter expectations amid MAX grounding, delays first 777X delivery until 2021
On Wednesday, Boeing reported revenue of $20 billion in the third quarter, representing a 21% decrease from this time last year amid fallout of the grounding of the Boeing 737 MAX jet.
The company said that the grounding resulted in a reduction of $4.9 billion after-tax in the second quarter of 2019. Costs included having to compensate airlines that fly the aircraft. In the results, Boeing said that it expects to get regulatory approval to return the 737 MAX back to service in the fourth quarter of 2019.
"Our top priority remains the safe return to service of the 737 MAX, and we're making steady progress," said Boeing President and Chief Executive Officer Dennis Muilenburg in a statement on Wednesday. "We've also taken action to further sharpen our company's focus on product and services safety, and we continue to deliver on customer commitments and capture new opportunities with our values of safety, quality and integrity always at the forefront."
Boeing said in July that it expected to take a $5.6 billion hit, which didn't include $100 million it will be paying to crash victims’ families and costs from any potential lawsuits.
The report comes after a difficult few weeks for Boeing as the company deals with the groundings of the 737 MAX aircraft after two fatal crashes that killed 346 passengers and crew.
In addition to the quarter's missed expectations in Wednesday's report, Boeing also announced that it has delayed the launch of the 777X program. Initially supposed to launch in 2020, the aircraft manufacturer said that it's now targeting early 2021 for the first delivery of the 777X.
TPG's Edward Russell reported on Tuesday that Boeing replaced Kevin McAllister as CEO of its commercial aircraft business, promoting Stan Deal to the role from its global services segment. He takes over as CEO of Boeing Commercial Airplanes effective immediately, the Chicago-based airframer said on Tuesday. Last week, Boeing CEO Dennis Muilenburg was removed from his role as chairman of the company after Boeing’s board of directors voted to separate the roles of CEO and chairman.