Boeing suffered a $1.2 billion hit in the first quarter due to the war in Ukraine and charges in its defence, space and security segment stemming from its Air Force One program.
An additional charge of $1.5 billion is expected across its commercial division starting in the current quarter.
The aerospace giant recorded a pretax charge of $212 million due to the war, which creates “short-term challenges”, while fixed-term programs in its defense business recorded more a billion dollar charges.
There was a $660 million charge related to the production of Air Force One, the US presidential jet, driven by higher supplier costs, higher costs to finalize technical requirements and schedule delays .
Its T-7A Red Hawk program, a military pilot training system, has cost $367 million, mostly due to supply chain constraints, Covid-19 and inflationary pressures as Boeing negotiates with suppliers .
The Chicago-based company reported a net loss of $1.24 billion in the first quarter on revenue of $14 billion, which translated into a loss per share of $2.06. Its net loss in the same period last year was $561 million.
“We still have work to do,” Dave Calhoun, general manager, said in a message to employees. He expected Boeing to generate positive operating cash flow for the full year, although cash flow was negative $3.2 billion in the first quarter.
Boeing has forecast an additional $1.5 billion in abnormal costs related to its 777 widebody program that will begin to hit in the June quarter due to a pause in 777-9 production in 2023. The schedule for the first delivery has been postponed to 2025. .
Boeing suspended technical support, flight training, parts delivery and maintenance support for Russian customers, and shut down Russian titanium sources.