Will Lower 737 Max Deliveries Dent Boeing (BA) Q3 Earnings?
Zacks Investment Research | Oct 17, 2019 11:43PM ET
The Boeing Company (NYSE:BA) is set to release third-quarter 2019 results on Oct 23, before the opening bell. Lower delivery volumes for the company’s 737 Max product line are expected to have impacted the bottom line in the to-be-reported quarter.
Let's take a detailed look at the factors likely to have influenced Boeing’s performance in the third quarter.
737 Max Grounding: A Major Blow
Once considered a key growth catalyst for Boeing’s top line, the 737 Max product line has been weighing heavily on the company following the crashes in Indonesia and Ethiopia, which resulted in grounding of the fleet in March. Since then, Boeing’s commercial business has been struggling.
In April, Boeing lowered this fleet’s production from 52 to 42 aircraft per month, while in June, Federal Aviation Administration (FAA) identified another potential safety issue with these jets. Meanwhile, a dispute between European regulators and FAA over the re-certification of 737 Max all the more jeopardized the return of this fleet to service.
Moreover, Boeing lost a deal to its rival Airbus, after Saudi Arabian carrier Flyadeal made a commitment to buy 30 A320 Neo jets in July, with options to acquire another 20 jets. The declaration replaced Flyadeal’s $5.9 billion-agreement with Boeing for 50 737 Max 8 jets last December.
No doubt, this dealt another blow to Boeing’s commercial business. The upcoming quarterly results can be expected to duly reflect these developments.
The Boeing Company Price and EPS Surprise
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