News / Business

Boeing reports Q2 loss of $234mn

Wednesday, 27 July 2016 6:33 PM [ Last Update: Wednesday, 27 July 2016 6:35 PM ]

Boeing has announced a second quarter loss of $234 million in what appears to be a result of charges related to setbacks from plans to produce certain commercial and military jets.

US aerospace giant Boeing has announced a loss of $234 million for the second quarter of 2016 -its first quarterly loss in nearly seven years.

The company says the loss is a result of the unexpected charges of about $2.1 billion relating to the production of military as well as commercial jets.

The loss was nevertheless smaller than analysts expected.

Despite the disappointing announcement, Boeing shares jumped after it confirmed its target for 2016 plane deliveries. The world’s biggest plane maker also emphasized in an announcement that the commercial aircraft market remains strong.

"The underlying operating performance of the company remains solid, with our commercial and defense teams again delivering strong revenues and operating cash flow," said Boeing chief executive Dennis Muilenburg.

Boeing had warned last week of the large unexpected charges, including $393 million in elevated costs associated with the KC-46 military tanker program, Reuters reported.

The company charged off $847 million after deciding not to upgrade two Boeing 787s that had been used in flight and ground testing.

And it booked $814 million in costs due to a slower production schedule for its iconic 747 jumbo, Reuters added.

Boeing has announced that its second quarter loss is mainly due to the current weakness in the air cargo market, as well. It has emphasized that the overall number of freighter jets produced will be lower than originally estimated.

The company has also decided against spending money to refurbish and sell its two remaining 787 Dreamliner test aircraft.

The results that the company has announced were the second consecutive quarter weighed down by the jumbo jetliner and the tanker program, the Wall Street Journal reported. Boeing last posted a quarterly loss in 2009 after hefty pretax charges.

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