GAMBIER (Ohio), Apr 24 (CNN Business): Boeing's earnings fell 21 per cent in the first three months of the year because of the crisis that grounded its bestselling 737 Max jet.
The aircraft maker reported both lower revenue and profits compared to a year ago. Before the fatal flight that led to the jet being grounded and further deliveries of it halted, the company had been expected to report improved results in the quarter. Boeing said it could no longer stand behind its earlier outlook, in which it said results would improve in 2019.
"Due to the uncertainty of the timing and conditions surrounding return to service of the 737 Max fleet, new guidance will be issued at a future date," it said.
Boeing didn't break out the complete cost of its results from the 737 Max crisis, but in a presentation to investors it said it had booked a charge related to fixing the plane's problems. The company said the cost to make the 737 Max was at least $1 billion higher in the the quarter because of its work on solving the issue. Boeing has continued to build the 737 Max even though it has halted deliveries.
The company said it is making progress in devising a software fix for the automatic safety feature on the 737 Max. That feature is the focus of investigations into two fatal crashes in the last six months.
In October, the pilots of a Lion Air jet in Indonesia apparently had problems overcoming a safety feature that forced the nose of the plane lower before it crashed. An Ethiopian Airlines jet on March 10 encountered a similar issue. The second crash prompted the jets' grounding on March 14.
"Across the company, we are focused on safety, returning the 737 Max to service, and earning and re-earning the trust and confidence of customers, regulators and the flying public," Boeing CEO Dennis Muilenburg said in a statement.
Although analysts had been expecting better results in the quarter ahead of the Ethiopian crash, they had lowered forecasts in recent weeks.
Shares of Boeing (BA) were slightly higher in premarket trading following the report.
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