A persistent 737 MAX problem for
Boeing
is growing, which sent the stock lower in early trading Friday.
Boeing
(ticker: BA) stock was down 3.2% at $185.25 in midday trading. The problem affects supplier
Spirit AeroSystems
(SPR) too. Its shares were off 1.7% at $16.86. The
S&P 500
was down 0.3%. The
Dow Jones Industrial Average
was up 0.1%.
The problem is that the fastener holes in the aft pressure bulkhead of some MAX 737 airplanes might not conform to specifications. The issue affects the 787-8 model, the shortest version of the MAX that is currently being sold. The 737-9 and 737-10 versions aren’t affected.
The part of the plane with the problem is supplied by Spirit Aeros Systems. The issue was disclosed back in April, but there are more planes to inspect than Boeing initially believed.
Boeing has said that the issue is not an immediate flight safety issue and that 737s can continue to operate safely. “We continue to take the time necessary to ensure each airplane meets our standards and regulatory requirements prior to ticketing and delivery,” the company said in an emailed statement.
Investors have known about the issue for months. The problem for Boeing stock is it means more work to deliver jets, which can extend times and keep customers waiting.
Boeing wanted to deliver some 400 to 450 MAX jets in 2023, while it had delivered 280 through the end of the third quarter, including 15 in September. That pace won’t get Boeing to the low end of its forecast range.
Boeing has delivered 371 jets of all kinds through the end of the third quarter.
Boeing might have to update its guidance when it reports third-quarter financial results on Oct. 25.
The issue has been a bigger deal for the supplier, which derives more than 60% of annual revenue from Boeing.
Spirit Aero
stock was about $36 a share before the defect was first talked about by the companies in April. Boeing shares were about $214 apiece.
That shows that to some extent, the problem is reflected in stock prices. It’s reflected in Wall Street numbers too. At the start of 2023, Wall Street expected Boeing would deliver about 600 planes. That number has dropped to about 550. Sales were projected to come in at about $81 billion. That number is now about $78 billion.
Analysts projected about $6.4 billion in sales for
Spirit AeroSystems
earlier in 2023. That projection is now just under $6.1 billion.
Write to Al Root at [email protected]
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