Boeing on Wednesday reported it had burned through nearly $4bn in the last quarter as it dealt with the consequences of a mid-flight blowout of a cabin panel on a brand-new Boeing 737 Max 9 jet.
But the US aircraft maker beat Wall Street expectations that were lowered after the incident prompted it to slow production of its bestselling jets.
Boeing said its first-quarter cash burn, a metric closely watched by investors, was $3.93bn, better than average analyst expectations of a cash burn of $4.49bn. The company also reported its first quarterly revenue drop in seven quarters.
In March, Boeing indicated it would use between $4bn and $4.5bn due to a crisis after the 5 January accident involving a nearly new 737 Max 9 aircraft.
The company’s shares, which have sunk 35% year to date, were up 3.6% in volatile premarket trading after its loss per share was narrower than expected.
“Well it could have been worse. While the loss and the cash outflow are not as bad as feared, the company is still clearly facing some serious challenges in the commercial aircraft division that will take some fixing,” Vertical Research Partners analyst Robert Stallard said in a note.
Since the accident on an Alaska Airlines-operated jet, the US Federal Aviation Administration has imposed a cap on production of Boeing’s strong-selling 737 Max aircraft line. The FAA also has told Boeing to develop a comprehensive plan to address “systemic quality-control issues”.
Before the report, Boeing’s CEO, Dave Calhoun, who will step down at the end of the year, said in a letter to employees that Boeing was “in a tough moment”, slowing the system to improve quality and safety.
“Lower deliveries can be difficult for our customers and for our financials. But safety and quality must and will come above all else,” he added.
Reuters reported this month that output of Boeing’s cash-cow 737 Max line had fallen sharply as US regulators stepped up factory checks.
Reuters contributed reporting