Boeing will record a huge $4.9 billion after-tax charge for on going grounding of the 737 MAX jet.
This charge will result in a $5.6 billion reduction of revenue and pre-tax earnings in the quarter, Boeing announced Thursday.
This is the biggest loss in earnings in 10 years, and the biggest such loss in company history.
In 2009, Boeing reported a loss of $1.6 billion after writing off three flight test 787 Dreamliners and taking a charge for delays on the 747-8.
“Additionally, Boeing’s estimated costs to produce the aircraft in the 737 accounting quantity increased by $1.7 billion in the second quarter, primarily due to higher costs associated with a longer than expected reduction in the production rate. The increased 737 program costs will reduce the margin of the 737 program in the second quarter and in future quarters.” company said
Boeing will issue its full second-quarter earnings release on July 24 and discuss the company’s financial results and outlook, including impact of 737 MAX grounding, during a conference call that day.