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Boeing takes $4.9 billion charge for prolonged grounding of 737 MAX planes

Added 07-19-19 04:03:01am EST - “Boeing Co said on Thursday it would take an after-tax charge of $4.9 billion in ...” - Reuters.com

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Posted By TheNewsCommenter: From Reuters.com: “Boeing takes $4.9 billion charge for prolonged grounding of 737 MAX...”. Below is an excerpt from the article.

SEATTLE (Reuters) - Boeing Co (BA.N) said on Thursday it would take an after-tax charge of $4.9 billion in the second quarter on estimated disruptions from the prolonged grounding of its lucrative 737 MAX passenger jets after two deadly crashes.

The charge is from “potential concessions and other considerations to customers,” and the impact of continued lower production, the world’s largest planemaker said in a statement, as airlines that use the planes extend flight cancellations until November.

The charge will result in a $5.6 billion reduction in revenue and pre-tax earnings in the second quarter, Boeing said.

Boeing shares rose 2 percent in after-hours trading, which Morgan Stanley analyst Rajeev Lalwani said was a sign that investors were comfortable with the size of the charge and Boeing’s production plans, disclosed less than a week before the company plans to release quarterly financial results on July 24.

“The company showed a degree of confidence in a return to service before year-end and getting up to 57 per month on 737 production in about 12 months, which investors were increasingly skeptical of,” Lalwani said.

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