Boeing (BA) shares fell 6.7% in recent Thursday trading after Chief Financial Officer Brian West said the aircraft manufacturers’ deliveries would not recover in Q2, remaining in line with Q1 due to ongoing production challenges.
West confirmed that the Civil Aviation Administration of China has requested additional validation on a lithium battery, causing Boeing to halt airplane deliveries to China. This is expected to impact quarterly deliveries and cash flow, he said.
The Boeing Defense, Space and Security division’s Q2 margins will be negative due to the cost pressure on the fixed-price development program, West said at the Wolfe Research Global Transportation & Industrials Conference.
“Secondly, the factory actions that are happening in Puget Sound do have a knock-on effect on derivative programs,” the executive said.