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Boeing posts $696M loss
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October 24, 1997: 10:23 a.m. ET
Company attributes deficit to production problems, late deliveries
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NEW YORK (CNNfn) - Boeing Co. said Friday a rise in the number of commercial jets delivered in its third quarter wasn't enough to keep production problems from resulting in a loss of $696 million, or 72 cents a share, on revenues of $11.3 billion.
The results were considerably below Wall Street estimates. Analysts had predicted a loss of 60 cents a share.
Those numbers were also considerably worse than the same period a year ago, when Boeing earned $466 million, or 48 cents a share, on sales of $9 billion.
The loss includes a $1.6 billion charge taken to offset the impact of unforeseen production problems and late-delivery costs, much of which was associated with its next-generation 737 passenger jet.
Although the company has implemented a recovery plan, Boeing said those production problems will continue to drag down its numbers in 1998.
For the first nine months, Boeing earned $349 million, or 35 cents a share, on revenue of $34.1 billion. In the year-ago period, the company earned $1.37 billion, or $1.41 a share, on sales of $25.5 billion.
Boeing warned Friday that its recovery plan could result in additional charges of up to $1 billion in 1998.
During the third quarter, Boeing delivered 89 jets, up from the 65 in the same period a year ago. For the first nine months of 1997, Boeing delivered 272 jets, compared with 185 in the 1996 period.
The company also said it is reviewing the commercial aircraft operations of its Douglas Products Division, a new unit created as part of Boeing's merger with McDonnell-Douglas.
Officials said decisions on whether to restructure or otherwise change plans for the Douglas line would be made in the fourth quarter. The first MD-95, the latest jetliner to come out of Douglas, is expected to be delivered in 1999.
--From staff writer Cyrus Afzali
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Boeing
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