Boeing burned $1 billion in cash during the second quarter after the protracted grounding of the 737 Max jetliner that followed two fatal crashes.
Investors are studying the performance to gauge how badly the company will be hurt if the Max crisis extends late into the year or beyond. Analysts had anticipated an even greater drain for the first full quarter of operations since commercial Max flights were halted in March: an average $2-billion outflow. A year earlier, Boeing generated $4.3 billion in free cash flow.
The total bill for Boeing stands at $8.3 billion, and counting, as the global grounding for its best-selling aircraft extends into a fifth month. The manufacturer continues to churn out 42 single-aisle 737 jets a month to dull the blow to suppliers. Since airlines and lessors can’t take delivery of Max planes with the flying ban in place, payments to Boeing have dropped while the company absorbs the expense of storing about 150 newly built aircraft.
The latest delay for Boeing’s first new jetliner since the 737 Max, “I don’t think is going to surprise a lot of people, but this means entry to service is pushed at least to 2021,” Ken Herbert, analyst with Canaccord Genuity, said by phone. There’s never been an indefinite halt to commercial flights ordered for an airplane as significant to airlines and Boeing as the 737 Max, which has a backlog of 4,415 unfilled orders.
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