Boeing reported a larger-than-expected quarterly loss on Wednesday, driven partly by higher costs on its contract to build two new Air Force One presidential aircraft. The company posted an adjusted loss of $2.90 per share, wider than the $1.87 loss analysts had forecast. Revenue also fell short, coming in at $16.2 billion against expectations of $17.9 billion.
The Air Force One program, a fixed-price contract, has been a persistent drain on Boeing's defense business. The company took a $482 million charge on the program in the quarter, citing higher supplier and engineering costs. Boeing CEO Dave Calhoun acknowledged the challenges, saying the company is working to stabilize the program.
The results underscore Boeing's broader struggles in its defense unit, which has faced supply chain disruptions, labor shortages, and fixed-price contracts that leave it vulnerable to cost overruns. The commercial side is also under pressure as the company slows 737 MAX production to address quality issues.
Investors and analysts are now watching whether Boeing can turn around its defense business and manage its cash burn. The company burned about $3.9 billion in free cash flow during the quarter. Boeing's shares fell about 3% in premarket trading after the earnings release.
The Air Force One contract, awarded in 2018, originally was valued at $3.9 billion. Boeing has now taken roughly $2 billion in charges on the program. The planes are expected to be delivered by 2027, delayed from an initial timeline. The company is renegotiating terms with the Air Force to share some of the cost burden.