Boeing just posted its first significant loss in a long time:
Boeing reported its first annual loss in more than two decades as costs from the 737 Max crashes rise sharply. Boeing said it lost $636 million in 2019, marking the company’s first annual loss since 1997 and in stark contrast to the profit it posted in $10.46 billion in 2018 — before a second crash grounded its best-selling planes worldwide.
The dismal results come as Boeing is struggling through the crisis stemming from two crashes of its 737 Max that killed all 346 people aboard the flights. The manufacturer this month suspended production of the planes, which regulators grounded in March after the second of the two fatal flights.
Boeing reported a loss of $2.33 per share for the fourth quarter of last year. Revenue in the last three months of the year dropped 37{de336c7190f620554615b98f51c6a13b1cc922a472176e2638084251692035b3} to $17.91 billion compared with $28.34 billion in the year-earlier period.
The debacle’s costs to Boeing are rising to more than $18 billion, the company said, roughly double what it outlined in the previous quarter. That amount includes an additional $2.6 billion pretax charge to compensate airlines and other 737 Max customers because of the grounding. Boeing had taken a $5.6 billion pretax charge in the second quarter to compensate its customers.
The company recently reported its worst annual sales figures in decades and it handed the crown to the world’s biggest aircraft manufacturer to its rival Airbus.
For some reason, this article reminded me of when Enron reported a surprise loss of similar proportions back in 2001.
In October 2001, Enron reported a loss of $618 million— its first quarterly loss in four years.
Due to the massive debt these megacorporations carry, it doesn’t take much to take them down once things start to go south. Enron filed for Chapter 11 bankruptcy only two months later. I’m not saying Boieng is in anywhere nearly as bad shape as Enron was, but the synchronicity may be worth noting.