Boeing Company (NYSE:BA) posted a 53% drop in profit in the third quarter and the aerospace behemoth said it would slash production of the 787 Dreamliner as it struggles to rebound from two tragic crashes of its 737 MAX planes which saw the jet grounded.
In the third quarter, the world’s biggest plane maker’s earnings came in at $895 million, or $1.45 per share, missing the mark of $2.09 per share set by Wall Street and dropping from the $1.89 billion, or $3.58 per share reported in the year-ago period.
Its revenue, however, beat the Street’s expectations, clocking in at $19.98 billion compared to the $19.7 billion expected by analysts.
Boeing‘s operating cash flow was a negative $2.4 billion, which dropped from positive free cash flow of $4.1 billion in the year-ago period, another disappointment stemming from the 737 MAX crisis.
READ: Boeing shares lower again as two global banks cut their ratings as 737 MAX jet worries increase
Boeing’s stock has faced mounting pressure in the wake of the two fatal crashes, which have forced it to ground the 737 MAX fleet and book billions of dollars in losses. The second deadly 737 MAX jet crash took place in Ethiopia in March.
Despite its recent setbacks, Boeing still forecasts that the 737 MAX will return to service in the fourth quarter of this year. The company also anticipates that it will jack up its production rate for 737s to 57 planes per month from 42 by the close of 2020.
“Our top priority remains the safe return to service of the 737 MAX and we’re making steady progress,” said Boeing CEO Dennis Muilenburg in a statement.
Earlier this week, Boeing sacked Kevin McAllister, the head of its commercial airplanes division, according to media reports, as part of a management overhaul stemming from the 737 MAX crisis. And speculation persists about whether CEO Dennis Muilenburg will be able to hang onto his job amid the scandal.
In another sign of weakness, Boeing announced that it would slash production of its 787 Dreamliner to 12 airplanes per month for about two years starting in late 2020.
Earlier this week, UBS downgraded its rating for Boeing to ‘neutral’ from ‘buy’ and cut its target price to $375 from $470.
The Swiss bank’s analysts said: “We see increasing risk that the Federal Aviation Administration won’t follow through with a certification flight in November and lift the emergency grounding order in December.”
Echoing the move, UBS’s rival Credit Suisse also cut its stance on Boeing to ‘neutral’ from ‘outperform’ and reduced its target price to $323 from $416.
In morning trade, Boeing shares managed to buck the negative headlines and jumped 3.7% higher to $349.13 after a recent sell-off.