Boeing Expects Charge, High Costs In Q2 Due To 737 MAX Grounding - Quick Facts

(RTTNews) - Boeing (BA) expects to record an after-tax charge of $4.9 billion or $8.74 per share related to an estimate of potential concessions and other considerations to customers for disruptions related to the 737 MAX grounding and associated delivery delays.

Boeing expects this charge to result in a $5.6 billion reduction of revenue and pre-tax earnings in the second quarter.

Boeing also stated that estimated costs to produce the aircraft in the 737 accounting quantity increased by $1.7 billion in second quarter, primarily due to higher costs associated with a longer than expected reduction in the production rate.

The company expects increased 737 program costs to reduce the margin of the 737 program in the second quarter and in future quarters.

Boeing said it has assumed, for purposes of the second-quarter financial results, that regulatory approval of 737 MAX return to service in the U.S. and other jurisdictions begins early in the fourth quarter 2019

"We remain focused on safely returning the 737 MAX to service," said Boeing Chairman, President and CEO Dennis Muilenburg.