Boeing reported a surprising $3.3 billion loss for the third quarter Wednesday, as revenue fell short of expectations and it took huge losses for fixed-cost government programs including new Air Force One presidential jets.
The company blamed higher manufacturing and supply-chain costs for driving the losses in government programs.
CEO David Calhoun said Boeing remains in a “challenging environment” and has “more work ahead to drive stability.”
The adjusted loss amounted to $6.18 per share on revenue of $15.96 billion. Analysts had expected the company to earn 13 cents per share and post revenue of $17.91 billion.
The shares fell by about 1% in trading before the market opened.
Revenue in Boeing’s normally consistent defense and space business tumbled by 20%, and it suffered $2.8 billion in losses on a military refueling tanker, Air Force One, a NASA program to build a spacecraft that can ferry astronauts to the International Space Station, and other programs.
Boeing has previously posted big losses on those projects, including about $1 billion in charges related to building two new president jets, a deal it struck with then-President Donald Trump.
Boeing’s commercial-airplanes business has recently shown improvement as air travel rises and airlines seek new planes. On Wednesday, Alaska Airlines announced that it would exercise options to buy 52 more 737 Max jets.
The airline side of Boeing operations saw revenue soar by 40% from a year earlier as it delivered more planes, but it still lost $643 million, only slightly less than a year ago.
Boeing was hampered by an inability to deliver any of its large 787 jets to airlines for most of a two-year period because of production flaws, although it resumed deliveries in late August, providing an important source of cash to the company.
In a letter to employees, the CEO said Boeing is making strides “in our turnaround effort,” and he highlighted that the company generated $2.9 billion in free cash flow during the quarter.
“That said, we remain in a challenging environment and have more work ahead to ensure we’re consistently delivering on our commitments and reestablishing the strength of our company,” Calhoun wrote. He said Boeing production facilities are “not pushing the system too fast. We’re slowing down when necessary” to make sure work gets done.
