Boeing charge-off totals $4.9 billion
Boeing said Thursday it is booking a $4.9 billion charge to cover possible compensation to airlines that have canceled thousands of flights since the 737 Max jet was grounded after two deadly accidents.
The airplane builder also said the Max-related fallout will cut $5.6 billion from its revenue and pre-tax earnings in the April-through-June quarter.
The Chicago-based company said the calculations were based on an assumption that regulatory approval for the plane’s return to flying will begin early in the fourth quarter. That timing is earlier than some analysts expected and may have contributed to a rally in Boeing shares in after-hours trading. Boeing is scheduled to report its quarterly results next week.
Boeing also raised its estimate of Max production costs by $1.7 billion because output will be curtailed longer than expected.
Boeing is still working on fixing flight-control software that appeared to play a role in crashes that killed 346 people off the coast of Indonesia and in Ethiopia. In March, regulators grounded the Boeing 737 Max and the company suspended deliveries of new jets.
Microsoft profits beat expectations
Microsoft on Thursday reported quarterly profits of $13.2 billion, powered in large part by a steadily growing cloud computing business that the company says now accounts for almost a third of its total revenue.
Microsoft said it had net income of $1.71 per share in the fiscal fourth quarter, which ended June 30. Earnings, adjusted for non-recurring gains, were $1.37 per share.
The results exceeded Wall Street expectations. The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of $1.21 per share.
The increase in net income was 49% but was affected by a one-time tax benefit of $2.6 billion from transferring some properties from foreign subsidiaries to the U.S. and Ireland.