Boeing to take $4.9 billion charge in Q2 on 737 Max grounding
Boeing Co. said late Thursday it will record an after-tax charge of $4.9 billion, or $8.74 a share, in connection with the 737 Max groundings. The charge will result in a $5.6 billion dent in revenue and pre-tax earnings in the quarter, Boeing said. Boeing also warned that the estimated costs to produce the aircraft 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 costs will reduce the margin of the 737 program in the second quarter and in future quarters. The 737 Max family has been grounded worldwide since March after a second fatal crash in less than five months. Preliminary reports found connections between the crashes, related to an anti-stall feature, and Boeing has been working on a software fix. Shares of Boeing rose 0.7% in the extended session after ending the regular trading day down 2.3%.
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