Boeing said Thursday it will take more than $2 billion in after-tax write-offs on three jet programs — the 787, 747 and KC-46 Air Force refueling tanker. Before taxes, the charges amount to $3 billion.
Boeing said Thursday that it will take more than $2 billion in after-tax write-offs as it absorbs the costs of well-publicized stumbles on three programs: the 787 Dreamliner, the 747-8 jumbo jet and a refueling tanker for the U.S. Air Force.
On a pretax basis, the charges total nearly $3 billion.
The largest blow is related to the Dreamliner, Boeing’s carbon-fiber jet, according to a company statement Thursday.
The plane maker is writing off two flight-test aircraft, at an after-tax cost of $847 million, because it can’t find any buyers. The jet, which debuted more than two years late in 2011, required wide-ranging retrofitting of the earliest planes.
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Boeing is also absorbing an after-tax charge of $814 million for the 747-8 as it drops plans to double output to 12 jumbos a year in 2019 from the current six-plane rate.
It expects to take a $393 million loss for the KC-46 aerial tanker, which faces delays due to development challenges.
The charges are the latest in a spate of Boeing write-offs. In April, the company announced $313 million in charges that caused it to miss analysts’ profit estimates for the first time in five years.
Those earlier charges were for cost overruns on building the Air Force refueling tankers as well as an expected shortfall in revenue from the sagging 747-8 program.
The losses serve as reminders of the costly delays that stalk commercial aerospace companies as they race complicated technology to market.
Boeing has vowed to manage its product development better in the aftermath of the Dreamliner, which amassed $28.7 billion in production and inventory costs as of March 31.
“These are the right, proactive decisions to strengthen our business going forward,” Boeing Chief Executive Dennis Muilenburg said in the statement.
Shares were down 0.9 percent to $132.30 in after-hours trading after initially falling as much as 1.9 percent after the company’s announcement of the charge.
All but the tanker charges will be noncash and won’t affect the company’s cash and revenue forecast for 2016, the plane maker said.
Boeing will update its earnings guidance Wednesday, when it reports second-quarter results.
The two Dreamliners were a product of the company’s early struggles with suppliers and design issues that left its initial aircraft overweight. Built in 2009, the jets have amassed 6,700 flight and ground-testing hours.
They were reclassified as a research-and-development expense and removed from 787 program inventory, where they counted toward deferred production costs.
Boeing has said it expects the 787 deferred costs, which measure funds already poured into inventory and labor but not yet recouped from completed sales, to plateau this year, then fall as it speeds output.
The company also lowered the number of 747 freighters it expects to produce to account for weakness in the air-cargo market.
Boeing has struggled to find buyers for the iconic humpbacked jet as airlines shift to more-efficient twin-engine models such as the company’s 777.
The company recorded a $885 million pretax loss for fourth-quarter earnings as it tapped the brakes on production.
Boeing’s tanker-related charge is the fourth in two years as it struggles to develop the first new U.S. tanker since the 1980s.
The company said the cost is related to delays announced earlier this year for the first 18 planes it is building for the Pentagon, as well as to a hardware fix for the plane’s refueling boom that was successfully tested this month.