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Boeing Sales and Profits Plummet as 737 Max Crisis Continues


Boeing reported sharp quarterly drops in sales, earnings and airplane deliveries on Wednesday as it continued to struggle with the fallout from the deadly crashes of two 737 Max jets.

With the Max still grounded, Boeing has ceased deliveries of its most popular product, throwing the company into turmoil.

The company said sales fell 21 percent from the same period last year to $20 billion. Earnings fell 43 percent to $1.26 billion.

The commercial airlines division lost $40 million from July to September after earning more than $2 billion in the same period a year ago. And commercial airline deliveries plummeted 67 percent in the quarter, with Boeing delivering just 62 planes.

The company said costs related to Max production increased by $900 million in the quarter, but did not provide an update on the total amount it expected the Max crisis to cost the company.

Boeing’s chief executive, Dennis A. Muilenburg, told analysts on a conference call he still expected the Federal Aviation Administration to clear the Max to fly in the next three months. The company recently conducted a dry run of the certification test flight that would set in motion the process of bringing the plane back to service, he said.

Boeing also announced setbacks to some of its other commercial airline programs. It will temporarily reduce the production rate for the 787 Dreamliner because of soft demand as a result of the global trade environment. And Boeing said it expected the first deliveries of the 777x, another long-haul plane, to take place in 2021 rather than 2020.

“Our top priority remains the safe return to service of the 737 Max, and we’re making steady progress,” Mr. Muilenburg said in a statement. “We’ve also taken action to further sharpen our company’s focus on product and services safety, and we continue to deliver on customer commitments and capture new opportunities with our values of safety, quality and integrity always at the forefront.”

Boeing is mired in the biggest crisis of its 103-year history. The Max remains grounded after seven months, and Boeing has said further delays could cause it to temporarily shut down production of the plane, a move that would have sweeping financial consequences.

The company has recently shaken up its top leadership. It ousted Kevin McAllister, the head of commercial airplanes, on Tuesday. And earlier this month, Boeing stripped Mr. Muilenburg of his title as chairman and elevated its lead independent director, David Calhoun, to the role.

On the conference call, Mr. Muilenburg endorsed the move to reduce his influence on the board. “I’m fully supportive of this division of labor and look forward to continuing my close partnership with Dave, who has a deep knowledge of the aerospace industry and has been a strong independent leader on Boeing’s board since 2009,” he said.

Mr. Muilenburg is set to testify before Congress next week in what is expected to be a tense showdown between the company and lawmakers, who have grown increasingly irate with Boeing over its handling of the Max crisis.

New revelations have made it clear that some Boeing employees voiced concern before the plane was certified about an automated system that played a role in both crashes.

And on Wednesday, Indonesian investigators who were looking into the crash of Lion Air Flight 610 last year told family members of the victims that the disaster was caused by systemic design flaws in the Max jet that were compounded by flight crew lapses.

Next week will be the one-year anniversary of the Lion Air crash, which killed all 189 people on board.


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