MIAMI — Boeing released its first-quarter earnings for 2019 earlier this week, bringing a pleasant surprise to most Boeing advocates. While the results weren’t great, they were much better than previously expected.

Boeing’s overall revenue fell 2% from 2018 to $22.9 million, while earnings per share (EPS) dropped to $3.75 per share, about 10% down from last year’s $4.15 per share.

737 MAX Grounding: $1 Billion

The company’s backlog currently sits at approximately 5,600 aircraft with a value of $399 billion—a wholesome figure for the company. Nevertheless, orders for the Boeing 737 fell 74% to just 32 aircraft in the first quarter. Production of the model is also being scaled back from 52 aircraft per month to 42.

Stored aircraft include: American, United, Copa, Fly Dubai, Icelandair, TUI (UK & DE), Shenzhen, Samoa (now NTU?), Norwegian, Turkish, & Air Canada. Photo: Joe G Walker

It goes without saying that Boeing did not reach its initial estimates for 1Q19, and the company pulled its full-year guidance as a result of the 737 MAX groundings. The company assured that more accurate guidance would be provided at a future date.

However, the earnings came with substantial confidence surrounding the future of the world’s largest aircraft manufacturer. Shareholders finally received a dollar figure on the damages stemming from the 737 MAX debacle, taking a $1 billion initial cost for its grounding.

Boeing was also aided by revenue growth in two segments: Defense, Space and Security, and Global Services. Defense, Space, and Security experienced a 2% increase in revenue to $6.6 billion with operating margin rising 1.1 basis points (bps) to 12.8%.

While Global Services saw revenue grow to $4.6 billion, the segment’s operating margin fell to 14.1% from last year. In addition, cash and marketable equities totaled $7.7 billion, quelling concerns regarding a possible liquidity crisis.

CEO Dennis Muilenburg remains focused on resolving the 737 MAX issues, stating, “Across the company, we are focused on safety, returning the 737 MAX to service, and earning and re-earning the trust and confidence of customers, regulators, and the flying public.”

Quarter 1 was “less about the financial results and far more focused on the impacts from the 737 MAX grounding and its impact on production” according to Tom Kennedy, head trader, an analyst at New England Investment and Retirement Group.

While these results definitely showed a less severe impact, Boeing still has a long way to go before it can recuperate from the consequences the 737 groundings has had on its finances and public image.

Total losses attributable to the 737 scandals are estimated to reach around $3 billion, but delays in the model’s recertification could create more costs for the manufacturer down the road.