The company spent $ 4.3 billion in cash during the quarter, struggling with increasing cancellations and a shortage of orders. The coronavirus crisis is a new problem for the aircraft manufacturer, already struggling with the 13-month grounding of its best-selling aircraft, the 737 Max.
Here’s how the business fared in the first quarter:
- EPS: a loss of $ 1.70
- Revenue: $ 16.91 billion
Boeing said it plans to cut the payroll by about 10 percent through voluntary measures and “involuntary layoffs if necessary”. Boeing had approximately 160,000 employees at the end of last year.
“We will have to make even bigger reductions in the areas most exposed to the condition of our commercial customers – more than 15% in our commercial aircraft and services, as well as in our corporate functions,” said the CEO. Dave Calhoun in a press release. staff memo.
Stocks rose more than 5% in morning trading.
Revenues fell 26% from the previous year to $ 16.91 billion and the company posted an adjusted loss per share of $ 1.70.
Wall Street expected the aircraft manufacturer to post a loss of $ 1.61 per share and revenues of $ 17.30 billion, according to Refinitiv estimates.
The company is calling analysts at 10:30 am (ET) when executives are expected to detail Boeing’s cost-cutting measures, the aircraft production plan and its expectations for raising additional cash.
Calhoun told CNBC that the global aviation market is “frozen” because of the virus and that “the industry is not interested in taking delivery of aircraft at this time.” Calhoun added that it seemed like “the thaw is beginning”, but he did not give details.
Boeing in recent weeks has already widely described its challenges, such as increasing cancellations of new aircraft.
With air travel to the United States down 95% from a year ago, Calhoun told shareholders on Monday that travel demand would probably take two or three years to return to 2019 levels, a sudden turnaround for an industry that was betting earlier this year. continuous growth.
Boeing was already dealing with the fallout from two accidents in its 737 Max that killed 346 people. The planes are still immobilized more than a year after being ordered out of the sky by federal regulators. Boeing is still working on a fix. Meanwhile, aircraft order cancellations have accumulated.
Boeing said it plans to cut production of planes, including cutting production of 787 Dreamliners to 10 per month, from 14 this year and later to seven per month in 2022. The reductions reflect a weak market for wide-body aircraft used for international travel.
Boeing recently withdrew nearly $ 14 billion in loan and requested $ 60 billion in government assistance for itself and its supply chain, which includes General Electric and Spirit Aerosystems, but Calhoun hesitated about the possibility to provide the government with a capital stake in exchange for federal assistance.
Speaking to CNBC on Wednesday, Calhoun declined to say whether Boeing planned to accept government aid, adding that “all options” were still on the table to increase liquidity.
Boeing recently offered employee buyouts and frozen hires.
GE also announced its first quarter results on Wednesday, saying revenues were down 8%.