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Boeing withheld its usual financial guidance for the coming year and vowed to focus on the safety and quality of its operations, as the US plane maker tries to stem the fallout from a mid-air blowout on one of its 737 Max 9 jets earlier this month.
Chief executive Dave Calhoun wrote in a note to employees on Wednesday that “now is not the time” to share financial or operational objectives as executives prepared to address investors publicly for the first time since part of a fuselage blew out during an Alaska Airlines flight on January 5.
The Max issue was overshadowing Boeing’s latest quarterly earnings results, which were better than expected. The company did not provide any estimate for the financial hit from the incident and the subsequent grounding of potentially affected jets.
It also did not disclose the impact of the growth limit on its 737 Max production rate recently imposed by the Federal Aviation Administration, the US aviation regulator.
The crisis has dealt a blow to Boeing’s management and sharpened scrutiny of its manufacturing and quality control processes, as well as those of key supplier Spirit AeroSystems. Spirit, which was spun out of Boeing in 2005, builds the Max fuselages and the door panel that blew out on the Alaska Airlines aircraft.
“The subject of how we interact with all of our suppliers will be a subject that we will be working on for quite a long time,” Calhoun told CNBC on Wednesday. Boeing outsources much of its supply chain to thousands of suppliers, including Spirit.
“On the subject of vertical integration and did it go too far — yeah, it probably did,” he said.
Calhoun declined to comment on reports that bolts that should have been attached to the Alaska jet’s door panel to hold it in place had never been installed.
“That’s the critical question,” he said, while stressing that he did not want to pre-empt the conclusions from the investigation being led by the National Transportation Safety Board.
However, he added that he was “convinced that we’ve got this [door] plug completely under control”.
Calhoun also said the Max 9 accident was a hit to Boeing’s airline customers, but insisted the company had not lost their confidence. The Boeing chief said he would work his “tail off . . . to satisfy [United Airlines chief executive] Scott Kirby”, who has said his airline is reconsidering its order of Max 10s, the largest Max variant which has yet to be certified by regulators.
The company on Wednesday reported a net loss of $30mn on revenue of $22bn in the three months ended December 31, which were both ahead of analysts’ forecasts.
Wall Street had pencilled in net income of $3.1bn on revenue of $89.5bn for 2024, according to an LSEG survey of analysts.
Boeing said it generated $4.4bn of free cash flow in 2023, falling within the $3bn to $5bn range it had guided to previously. The company did not provide an update on its 2025-26 cash flow target, having set a goal of about $10bn for that period at an investor day in November 2022.
The company said on Wednesday it was producing 737 Maxes at a rate of 38 a month by the end of 2023, meeting its target.
Robert Stallard, analyst at Vertical Research Partners, said the fourth quarter had “ironically . . . ended up being a decent quarter for Boeing particularly for cash flow”.
“The full ramifications of the latest Max safety issues have yet to be felt, and we see it as telling that Boeing has not provided any update on its outlook or guidance in this morning’s release,” said Stallard in a note, adding that Boeing’s “immediate fate is arguably in the hands of the FAA”.
Calhoun said the company had “much to prove” to regain its stakeholders’ confidence. “I’ve had tough and direct conversations with our customers, regulators and lawmakers. They are disappointed.”
Boeing shares were up more than 3.5 per cent in opening trading on Wednesday.