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Boeing 737 Max groundings hit company revenue, profit

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Boeing Company CEO Dennis Muilenburg is apologizing after two deadly 737 MAX plane crashes. Muilenburg says Boeing has teams of experts “working tirelessly” to prevent anymore accidents.
USA TODAY

Boeing’s revenue and profit fell in the first quarter from the global grounding of its 737 Max jets following two deadly crashes, but the company said it was making “steady progress” on a fix.

The company on Wednesday reported a $1 billion increase in production costs connected to the 737 Max defect and warned that the crisis would force it to revise its earnings expectations for the full year.

Boeing recorded revenue of $22.9 billion in the first quarter, down 2% from a year earlier and nearly matching S&P Global Market Intelligence expectations of $23 billion.

The manufacturer posted net earnings of $2.15 billion, exceeding expectations of $2 billion but down 13.2% from a year earlier.

The company’s 737 Max planes were grounded in March after an Ethiopian Airlines crash that killed all 157 people aboard and a Lion Air crash that killed all 189 people onboard.

Boeing CEO Dennis Muilenburg has apologized and acknowledged that a maneuvering system contributed to the crashes.

Boeing CEO accepts blame:: Muilenburg apologizes to families of victims: ‘We own it’

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Boeing said Wednesday in a statement that the company “is making steady progress on the path to final certification for a software update,” having completed more than 135 test and production flights with the update installed.

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The company said it will also roll out “a robust package of training and educational resources.”

“Across the company, we are focused on safety, returning the 737 MAX to service, and earning and re-earning the trust and confidence of customers, regulators and the flying public,” Muilenburg said in a statement.

Boeing said it would eventually revise its projected earnings for 2019 based on the 737 Max grounding but not yet “due to the uncertainty of the timing and conditions surrounding return to service.”

Boeing shares were flat in pre-market trading at $374.

The company delivered 149 commercial airplanes in the first quarter, down from 184 a year ago, reflecting the impact of the 737 Max. As a result, commercial airplane revenue fell 8.7% to $11.8 billion.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.

 

Read or Share this story: https://www.usatoday.com/story/money/2019/04/24/boeing-earnings-737-max-8-crashes/3559574002/




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