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July 24, 2019, 11:39 a.m. EDT

Boeing stock falls after ‘messy’ second quarter, doubts on yet another plane

‘It could have been worse’ at Boeing

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By Claudia Assis, MarketWatch

Getty Images
A model of a Boeing 777x displayed at the Farnborough airshow last year.

Boeing Co. shares fell Wednesday after the aerospace and defense company reported a massive quarterly loss and cast doubt on yet another one of its planes.

Boeing /zigman2/quotes/208579720/composite BA -2.60%  earlier Wednesday reported an adjusted loss of $5.82 a share on sales of $15.7 billion. Analysts polled by FactSet had braced for worse: They expected a quarterly loss of $6.69 a share on sales of $15 billion. Boeing earned an adjusted $3.33 a share in the year-ago quarter.

Boeing said it is still targeting the first delivery of its 777x plane for late 2020, but there is “significant risk to this schedule given engine challenges.” Those challenges are delaying the plane’s first flight until early 2020, Boeing said.

“It could have been worse,” Robert Stallard, an analyst at Vertical Partners, said in a note. Sales were down 35% year-over-year, but were still ahead of a “conservative” forecast. Results in Boeing's defense business were also ahead, although pinned on one-off property gains.

See also: Boeing ‘shielded’ from 737 Max order cancellations

There remains “considerable uncertainty in the estimates going forward, as there are no doubt many different assumptions regarding the Max and its return to action,” he said. And getting the 777x certified for delivery less than one year after first flight “is very optimistic.”

Boeing once again eschewed guidance due to the uncertainty surrounding the 737 Max fleet, grounded world-wide since March after two fatal crashes less than five months apart. Boeing also did not provide an update on the timing for the Max recertification. The company has been working on a software fix for the plane, whose crashes were linked to a faulty antistall feature.

In the commercial airplanes division, analysts at Goldman Sachs highlighted the “strong” performance of the 787 program. Overall, however, Boeing’s second-quarter results were “messy” and the focus continues to be on the Max, they said.

There’s more bad news to come for Boeing “because this bleeding isn’t going to stop,” said Naeem Aslam, chief market analyst with TF Global Markets, in a note.

“I do not think investors should be rushing anytime soon to buy or even think of averaging down their cost because there is more downside,” he said, citing legal actions on the part of the airlines affected by the Max grounding.

Airlines have extended flight cancellations through the fall in connection with the grounding.

Boeing last week said it expected a $5.6 billion hit in the second-quarter revenue and pretax earnings and increases in production costs.

Boeing shares were poised to extend their losing streak for a third straight session, down more than 2%.

The shares are up more than 13% this year, compared with gains of 20% and 17% for the S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.40%  and the Dow Jones Industrial Average. /zigman2/quotes/210598065/realtime DJIA +1.05%  Boeing is a Dow component.

$ 175.44
-4.69 -2.60%
Volume: 40.70M
Aug. 12, 2020 4:00p
P/E Ratio
Dividend Yield
Market Cap
$101.67 billion
Rev. per Employee
+46.66 +1.40%
Volume: 2.25B
Aug. 12, 2020 5:10p
US : Dow Jones Global
+289.93 +1.05%
Volume: 342.07M
Aug. 12, 2020 5:10p

Claudia Assis is a San Francisco-based reporter for MarketWatch. Follow her on Twitter @ClaudiaAssisMW.

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