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Apr 24, 2019

Aerospace and Defense I Boeing pulls 2019 guidance, pauses share buybacks due to 737 Max uncertainty

Michael Sheetz

Boeing Co. 737 Max planes are seen at the company's manufacturing facility in Renton, Washington, U.S., on Tuesday, Mar. 12, 2019.
David Ryder | Bloomberg | Getty Images
Boeing announced Wednesday it will pause share buybacks and is withdrawing its full year 2019 financial forecast while it works through issues surrounding its 737 Max aircraft, whose software is suspected in two deadly crashes.
Boeing said the previous guidance "does not reflect 737 MAX impacts."
The company also delivered first-quarter earnings that were in line with Wall Street expectations while revenue was lighter than expected.
Shares of Boeing initially fell in premarket trading after the release but bounced back, trading up more than 1% from Tuesday's close of $374.02 a share.
Expectations vs. results
  • EPS: $3.16 a share vs. $3.16 a share expected in a Refinitiv survey of analysts.
  • Revenue: $22.92 billion vs. $22.98 billion expected in the survey.
"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," Chairman and CEO Dennis Muilenburg said in a statement, adding that this is "a challenging time for our customers, stakeholders and the company."
Boeing said it has completed more than 135 test and production flights of updated software for the 737 Max. The Federal Aviation Administration, as well as regulators around the world, grounded the airplane in mid-March after the crash of an Ethiopian Airlines plane. That crash came five months after a Lion Air 7737 Max crashed in Indonesia. A total of 346 people died in the crashes.
The company is expected to submit its plan to fix the Max to the FAA shortly, people familiar with the matter told CNBC.
Boeing reported a total order backlog for its commercial airplane business of $399 billion, citing more than 5,600 orders. That is down from the previous quarter, which had an order backlog of $412 billion with more than 5,900 orders.

Source.- CNBC

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