Boeing reported its biggest quarterly loss as the grounding of the 737 MAX drags on results (STEPHEN BRASHEAR)

New York (AFP) – Boeing reported a second-quarter loss of $2.9 billion Wednesday as the grounding of 737 MAX following two deadly crashes continues to weigh on the company.

The loss, the biggest ever in a single quarter for the aerospace giant, follows last week’s announcement that Boeing would set aside $4.9 billion after taxes to compensate airlines for canceled flights and the delay in plane deliveries. 

Revenues tumbled 35.1 percent to $15.8 billion, reflecting the hit from a halt to deliveries of the 737 MAX, a top-selling plane.

“This is a defining moment for Boeing and we remain focused on our enduring values of safety, quality, and integrity in all that we do as we work to safely return the 737 MAX to service,” said chief executive Dennis Muilenburg.

The 737 MAX has been grounded since mid-March following the March 10 Ethiopian Airlines crash, the second of two crashes that together claimed 346 lives.

Boeing is developing a software fix to address a problem with a flight handling system that was linked to both crashes.

Airlines have repeatedly pushed back their target dates for returning the jets to service as the regulatory timeframe has dragged on, most recently when the Federal Aviation Administration in June identified problems with microprocessor during simulator testing.

“Disciplined development and testing is underway and we will submit the final software package to the FAA once we have satisfied all of their certification requirements,” Boeing said.

Boeing has said it is targeting early in the fourth quarter to win approval from regulators.

The company, which has pulled its full-year profit forecast due to uncertainty about the MAX, boosted dividend payments in the second quarter. Compared with last year, Boeing spent $1.2 billion in dividends, up 20 percent from the year-ago period.

– Other planes impacted? –

Boeing shares have lost more than 13 percent since the Ethiopian crash, a time period that has seen the broader S&P 500 gain more than nine percent. 

But Boeing shares rallied following last week’s announcement about the $4.9 billion charge and an additional $1.7 billion in costs due to lower production levels of the 737 MAX.

Although the costs were higher than expected, analysts said investors were relieved that Boeing did not further cut production levels of the MAX and that the company still forecasts a return to service for the plane later this year.

The company is expected to be pushed for more details on its interactions with global regulators and customers during a conference call later Wednesday morning. 

Boeing will also likely be probed on whether the 737 MAX crisis is diverting attention from other key programs, such as the development of a new middle-range aircraft sought by airlines.

Boeing on Wednesday pushed back the timeframe for first flights of the 777X, a new long-haul plane under development. It pointed to problems with the 777X engine, which is being built by General Electric. 

The company said it is still targeting late 2020 for first delivery of the planes but said “there is significant risk to this schedule given engine challenges, which are delaying first flight until early 2020.”

Shares fell 0.9 percent to $369.42 in pre-market trading.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.