Boeing posts better than expected Q3 sales, assumes 737 Max return to service in Q4

Boeing posted much weaker than expected third quarter profits on the back of massive delays in shipments of its 737 Max, but sales fell by less than anticipated and the company said it expected the 737 Max to return to air worthy status before the end of the year.

For the three months ending on 30 September, the aerospace giant posted adjusted proforma earnings per share of $1.45 (consensus: $2.16), on the back of $19.98bn (consensus: $19.61bn) in revenues, against $25.15bn one year ago.

Net income was 51% below the year-ago figure at $1.17bn.

Boeing chief, Dennis Muilenberg, said that the manufacturer had developed software and training updates for the 737 MAX and that, for the purposes of its third quarter financials, had worked under the assumption that the aircraft would return to service in the fourth of 2019, with production of the jet set to ramp up from 42 per month to 57 per month by late 2020.

That was contrary to recent speculation in some corners of a further delay into the spring of 2020.

Analysts at Bank of America-Merrill Lynch, who had anticipated fourth quarter EPS of $2.86, were expecting the 737 MAX to return to service in March 2020.

"Our top priority remains the safe return to service of the 737 MAX, and we're making steady progress," Muilenburg said.

Sales at Boeing's commercial airplanes wing dropped 41% to $8.25bn as the number of jet deliveries declined from 190 one year ago to just 62.

Yet while according to FactSet analysts on the Street had been anticipating 65 deliveries during the period, Boeing's sales topped the $7.78bn expected by the consensus.

Roughly one year before, two fatal crashes in Indonesia and Ethiopia involving its new 737 MAX killed all passengers onboard, leading to the grounding of the new model and a halt on deliveries.

Significantly, the company said there was "no significant change" to the estimate for potential concessions to customers resulting from the 737 MAX grounding.

However, "given the current global trade environment" production of the 787 would be cut to 12 jets per month for two years, starting from late 2020.

On the flip-side, Boeing was targeting first deliveries of its 777X for early 2021.

At its space and security arm meanwhile, revenues edged up 2.0% to $7.04bn (consensus: $6.76bn), and in global services by 14% to $4.66bn (consensus: $4.38bn).

Among the significant milestones reached by the division during the quarter were the first test flight of the MQ-25 unmanned aerial refueler, the maiden flight of the first P-8A Poseidon for the Royal Air Force, final assembly of the Space Launch System core stage structure and the 100th test flight of the T-7A Red Hawk.

The company's operating cash flow was severely hit during the quarter, with Boeing registering an outflow of $2.42bn instead of the inflow of $4.56bn seen in the comparable year earlier period.

Boeing said that it had $10.9bn of cash and marketable securities on hand at period end.

As of 1245 BST, shares of Boeing were edging up 0.75% to $339.52.