Troubled aircraft manufacturer Boeing has seen a net loss of $355m for the first quarter of 2024 and an 8% drop in revenue after limiting production of its 737 family of aircraft following the discovery of serious issues with quality control.
Boeing recorded a more than $1bn decrease in revenue from Q1 2023, its first drop in seven quarters, after a 36% decrease in aircraft deliveries for the first quarter, though losses were largely more conservative than expected.
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CEO Dave Calhoun, who recently announced he would step down at the end of the year, said: “Our first quarter results reflect the immediate actions we’ve taken to slow down 737 production to drive improvements in quality.
“We will take the time necessary to strengthen our quality and safety management systems and this work will position us for a stronger and more stable future.”
The aircraft manufacturer has struggled through the first three months of 2024 after a door plug blow out incident on an Alaska Airlines 737 MAX in January sparked a series of disapproving reports and investigations by the FAA, National Transportation Safety Board and even the US Department of Justice.
However, despite the overall poorer results, the impact of Boeing’s difficult start to the year was more limited than had been predicted by industry experts, with its cash burn of $3.93bn coming in significantly below Wall Street predictions of around $4.5bn.
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By GlobalDataAdditionally, while its cash burn was still around $3.14bn worse than in Q1 2023, Boeing actually also saw a smaller loss than last year, when it recorded a net loss of $425m.
As a result, the manufacturer’s shares rose to a high of 5% on Wednesday (24 April) before adjusting back to around where they started before the release of the earnings report, though they remain more than 30% lower than at the beginning of the year.
Boeing will likely be hoping the better than expected results, alongside the executive and production changes announced over the last few months, might take some of the heat off the company as it attempts to regain its once ironclad reputation.
Calhoun also appeared to recognise the importance of the need to be seen to be taking action in a message shared to employees before the release of the Q1 results which claimed a continued focus on the “sweeping actions” being taken by the company.
He said: “We are using this period, as difficult as it is, to deliberately slow the system, stabilize the supply chain, fortify our factory operations and position Boeing to deliver with the predictability and quality our customers demand for the long term.
“As these efforts begin to take hold, we’re seeing early signs of more predictable, stable and efficient cycle times in our 737 factory, and expect this will continue to slowly improve.”
The slowdown on the 737 production line was directly seen in the number of aircraft delivered by Boeing in the first quarter, with 767 and 787 deliveries marginally increasing while 737 deliveries dropped around 40% from 113 in Q1 2023 to 67 in Q1 2024.
The news comes only a week after former Boeing engineer and whistleblower Sam Salehpour spoke to US lawmakers about his allegations about the company, which included claims of bullying for reporting safety concerns.
