With the world’s best-selling passenger plane grounded, Boeing needs to reassure investors in the week ahead that its financial outlook is clearing up.
The company is due to report first-quarter financial results on Wednesday. Five days later, it holds its annual shareholder meeting. What would have been celebrations of Boeing’s unrivaled success of its latest 737 model instead find the company defending its procedures and products while working to fix software under scrutiny in two deadly crashes.
The 737 Max planes have been grounded since March and could remain out of the skies until this summer. This follows two crashes that killed a combined 346 people. Preliminary reports indicate the crashes are linked to software designed to keep the plane from stalling while in the air. Boeing has been testing the software fix and will be asking the Federal Aviation Administration to certify it can be used without requiring flight simulator training.
Boeing has a backlog of more than 4,600 orders for its 737 Max plane. The plane is expected to generate about a third of the company’s revenues over the next five years. Fixing the plane, and quieting the fears of the flying public are fundamental to the company’s finances.
Before problems with the 737 Max grounded the plane, Boeing was predicting record sales and record profits this year. The company delivered fewer commercial planes in the first quarter compared to a year ago, led by a big drop in 737 Max deliveries. No airline ordered any of the newest 737 model last month.
Despite the turbulence, Boeing stock is up 17 percent this year. That’s slightly better performance than the S&P 500. Investors know the outlook remains cloudy, but, so far, they remain confident clearer skies are ahead.
Tom Hudson hosts “The Sunshine Economy” on WLRN-FM, where he is the vice president of news. Twitter: @HudsonsView