The second-quarter report published on Wednesday reveals that Boeing’s profits dropped by $5.6 billion in the wake of prolonged grounding of its best-selling 737 MAX jet.
Boeing missed the projected sales by a wide margin in the quarter ending on June 30. The world’s largest planemaker expected to generate $20.45 billion in revenue, but it fell $5.6 billion short of those projections, earning just $15.8 billion.
Boeing’s revenue this quarter is down by 35% compared to the second quarter of 2018, when the company made $24.8 billion. The aerospace company also delivered 104 fewer airplanes to customers in the second quarter of this year than during the same period last year.
The aircraft manufacturer attributes the reduced profits and sales to the worldwide groundings of its flagship 737 MAX jet. An aircraft of this type crashed in Indonesia in late October 2018, followed by another crash in Ethiopia in March 2019, killing a total of 346 people. The planemaker has since cut the production of its best-selling airplane.
As a consequence of these events, the company has accumulated a total backlog of $474 billion, including more than 5,500 commercial airplanes.
The second-quarter financial report states an adjusted loss per share of $5.21 (GAAP) and core (non-GAAP)* loss of $5.82 per share. Boeing shares were down 1% in premarket trading on Wednesday.
Since the previously issued 2019 financial outlook does not reflect the impact caused by the issues related to 737 MAX, and due to difficulty in determining the timing and conditions under which the 737 MAX fleet will return to service, the aerospace giant announced that a new outlook would be published at a future date.
“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 Boeing Chairman, President and Chief Executive Officer Dennis Muilenburg. “During these challenging times, teams across our enterprise continue to perform at a high level while delivering on commitments and capturing new opportunities driven by strong, long-term fundamentals.”