Boeing Defense has ‘messy' Q1
Boeing is developing a replacement for the VC-25A Air Force One presidential airplane, shown here. (US Air Force)
Boeing's Defense, Space & Security (BDS) business generated a USD929 million loss from operations in the first quarter (Q1) of 2022 fuelled by USD1.3 billion in earnings charges on four military aviation development programmes, the US aerospace manufacturer announced on 27 April.
BDS had “a messy quarter”, Boeing president and CEO Dave Calhoun told analysts on the company's earnings call.
The VC-25B Air Force One presidential airplane replacement programme recorded the biggest charge – USD660 million – “largely driven by higher supplier costs, higher costs to finalise certain technical requirements, and schedule delays”, Boeing said in a statement. “We continue to make steady progress on this programme and continue working closely with our customer to assess impacts to the programme.”
The T-7A Red Hawk training jet programme took a USD367 million charge “primarily driven by ongoing supplier negotiations impacted by supply chain constraints, Covid-19, and inflationary pressures”, the statement says. “We remain focused on delivering the first production aircraft to the US Air Force next year.”
The KC-46A Pegasus tanker programme recorded a USD165 million charge “primarily reflecting higher supply chain and other costs”, while the MQ-25 Stingray unmanned tanker programme took a USD78 million charge to increase engineering support for testing and certification activities, Boeing said.
Boeing is developing the MQ-25 for the US Navy and the other three aircraft for the US Air Force. All four aircraft programmes have fixed-price development contracts, making Boeing responsible for cost overruns.
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