Boeing suspends financial forecasts as it focuses on safety
Boeing said Wednesday it would not provide a full-year financial forecast, the clearest indication yet that the company is trying to assure customers it is prioritizing safety amid growing concerns about its popular 737 Max jets.
Even as it announced its quarterly results, the company decided to focus on discussing quality control instead. Boeing is trying to stem the fallout from an incident less than four weeks ago that left a hole blown open in an Alaska Airlines 737 Max 9 plane shortly after takeoff.
“While we often use this time of year to share or update our financial and operational goals, now is not the time to do so,” Boeing CEO Dave Calhoun wrote in a message to employees. “We will simply focus on each subsequent aircraft while doing everything possible to support our customers, follow the lead of our regulator and ensure the highest standards of safety and quality in everything we do.”
With the Jan. 5 incident still under investigation by federal officials, Boeing executives struggled with how much to emphasize efforts to improve safety while reassuring shareholders about financial performance. Concerns about quality have taken on new urgency after news reports, including in The New York Times, that Boeing workers had opened and reinstalled the panel that blew out the plane, known as a door plug.
The incident frightened passengers and forced the pilots to make an emergency landing in Portland, Oregon. It renewed concerns among some aviation experts that Boeing has long focused too much on boosting profits and enriching shareholders through buybacks and dividends, and not enough on engineering and safety. Experts raised similar concerns after two 737 Max 8 accidents in 2018 and 2019 killed nearly 350 people.
The effects of the incident on Boeing's financial performance are not yet known: the results it announced on Wednesday covered the three months ended December 31.
In its earnings release on Wednesday, the company said it was producing 737 Max jets at a rate of 38 per month. It had hoped to increase that number to 42 per month this year, an annual increase of about 100 planes.
But the Federal Aviation Administration said last week it was limiting Boeing's ability to increase production of all 737 Max planes, including approving any additional assembly lines, until the company proved it had resolved its quality control problems.
The company said Wednesday it lost $30 million in the fourth quarter, an improvement from a loss of $663 million in the same period a year earlier. Sales rose to $22 billion, up from about $20 billion a year earlier.
The National Transportation Safety Board is expected to issue a preliminary report on the Alaska Airlines incident in the coming days.