Boeing records $449m Q3 loss, cuts 7,000 more jobs

Andrew Cummings
October 28, 2020

The company's revenue came in ahead of estimates but the company is still struggling as virus and a plunge in air travel hurts demand for new aircraft.

The planemaker said sales in the defense business dipped 2% to $6.85 billion, while commercial jet revenue slumped 56% to $3.60 billion.

Pressured by a prolonged commercial travel downturn and the hit from 737 MAX crisis, Boeing on Wednesday announced an additional 7,000 job cuts that will lower headcount by 30,000 positions over two years. Boeing has spent about two years overhauling flight-control software and computers on the plane after an automated anti-stall system pushed the noses down before crashes in Indonesia and Ethiopia that killed a total of 346 people in 2018 and 2019.

Boeing said it expects passenger travel to return to pre-pandemic levels in about three years.

"As we align to market realities, our business units and functions are carefully making staffing decisions to prioritize natural attrition and stability in order to limit the impact on our people and our company", Calhoun said in a staff note.

Boeing Co. updated its jobs plan on the same day it reported a $449 million loss for the third quarter, a swing from the $1.17 billion it earned in the same period a year ago.

"We anticipate a workforce of about 130,000 employees by the end of 2021".

The company has also taken steps to raise cash in the face of the hard market, undertaking a $25 billion bond offering in the spring that averted the need to take advantage of a United States government program that had been established for the company. However, when you add in the pandemic's effect, Boeing has so far delivered just 98 aircraft in the first nine months of 2020. Boeing's own estimates show that the pandemic could diminish industry demand for more aircraft for the next decade.

For Boeing, the focus is "cash, cash and cash", George Ferguson, analyst with Bloomberg Intelligence, said in an interview before the results were announced. Earlier this month, it announced it would consolidate production of its 787 Dreamliner, a wide-body plane used mostly for worldwide routes, at a single facility in North Charleston, South Carolina, instead of operating lines there and in the Seattle area.

Boeing reported an adjusted loss of of $1.39 a share, better than the average shortfall of $2.08 expected by analysts.

Boeing executives will detail the results on a 10:30 a.m. ET call.

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