Boeing is one of the most famous aircraft manufacturers in the world, but even the aviation giant is struggling to cope with problems. It is worth mentioning that, the company reported a record net loss that topped $11.9 billion in 2020. Interestingly, results worsened after it pushed out the deliveries of its 777X planes to late 2023. The company took a $6.5 billion charge in the fourth quarter against the wide-body program as the coronavirus pandemic affected the industry.
Importantly, Boeing’s shares fell by more than 4% in morning trading after its report.
It is worth mentioning that, Boeing lost $15.25 a share in the fourth quarter on an adjusted basis. Moreover, the company booked a $648 million write-down against “abnormal production costs” on the 737 Max program.
Unfortunately, the company’s fourth quarter revenue fell 15% from a year earlier to $15.3 billion. Interestingly, Boeing’s net loss for the three months widened to $8.4 billion from $1.01 billion in the fourth quarter of 2019.
Boeing and various factors
Boeing is trying to adapt to the ever-changing environment. It won’t be easy to deal with challenges as new travel restrictions as well as the coronavirus pandemic reduce already depressed demand for flights.
It is no secret that the pandemic had a tremendous impact on commercial air travel. This issue coupled with the 737 Max grounding, affected the company’s results in 2020. Importantly, revenue in the commercial airplanes unit declined 37% in the fourth quarter from a year earlier to $4.73 billion.
Unfortunately, the company’s aircraft deliveries fell to the lowest level in decades. It makes sense, cancellations hit records in 2020. The problems connected with the Boeing 737 Max as well as a collapse in travel demand due to the pandemic reduced the number of airplanes delivered in 2020.
Hopefully, sales in the company’s increasingly important defense, space, and security business helped to offset some of the weakness. In the fourth quarter, sales rose 14% to $6.78 billion.
It is worth noting that, U.S. aviation regulators in November cleared the Boeing 737 Max, to fly again. As a result, the company started to deliver roughly 400 new jets it produced at its Seattle-based facility but was not able to deliver the airplanes to the customers in previous years. As a reminder, deliveries are key for the company because it’s when airlines pay the major part of the plane’s price. It would take time for the company to regain the trust of airlines as well as passengers.