Boeing Reports Loss, Hit By Dreamliner and Starliner Setbacks
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Boeing Co. on Wednesday reported a quarterly loss as 787 Dreamliner production problems and its latest space-launch setback offset a recovery in demand for new aircraft. The company said it had a net loss of $132 million, compared with the $466 million deficit a year earlier, on sales up 8% at $15.3 billion. The per-share loss of 19 cents was a penny better than the consensus among analysts polled by FactSet. Boeing's recovery from the prolonged 737 MAX crisis after two crashes of that jet has been hampered by manufacturing problems that have frozen most 787 deliveries for much of the last year. Its troubles mounted in July when technical issues on the Starliner further delayed a redo of an earlier botched launch of the spacecraft. The company took a $183 million charge in the quarter to cover disrupted Dreamliner production, which has been slowed to two a month from around five after Boeing accumulated more than 100 jets awaiting delivery. Boeing estimated on Wednesday the cost of the disrupted production could be as high as $1 billion. The $185 million charge on the Starliner space taxi follows a $410 million charge last year to pay for a new launch after the first in December 2019 failed to reach the correct orbit. Faulty valves scuttled another launch attempt during the summer, with the flight now delayed until next year.
After two days of gains, the Swiss stock market closed with losses. However, the latest gains were largely defended. A stronger decline was prevented by the convincing reporting season. The SMI lost 0.5 per cent to 12,087 points, closing just above its low for the day. Among the 20 SMI stocks, there were ten price losers and ten price winners. 31.96 (previously: 36.32) million shares were traded. The banking stocks showed a mixed picture after the quarterly figures of Deutsche Bank. These were again convincing. UBS gained 0.3 per cent, while CS Group slipped 1.0 per cent. Sulzer shares were up 0.4 per cent. The industrial corporation reported 15.7 percent more new business in the third quarter than in the same period last year, adjusted for currency effects. Order rose by 11.8 per cent, the group said.
European equity markets ended in the red on Wednesday, as investors analysed the release of numerous corporate results in Europe and the United States, while continuing to monitor the health situation and the difficulties of the real estate sector in China. The Stoxx Europe 600 index lost 0.4% to 473.9 points. In Paris, the CAC 40 and the SBF 120 gave up 0.2% and 0.1%, respectively. In Frankfurt, the DAX 40 lost 0.4%, while the FTSE 100 in London fell 0.3%. Amid an assault from activist investors, GlaxoSmithKline CEO Emma Walmsley announced third-quarter financial results that she said show the company is on the right track. The company reported adjusted earnings of £0.37 per share (about 51 cents), beating the FactSet analyst consensus estimate of £0.29 per share, and sales of £9.1 billion, outpacing the analyst estimate of £8.7 billion. Deutsche Bank AG’s businesses did better than expected in the third quarter but higher costs and a continued slowdown in its investment-banking arm weighed on results. Quarterly net profit rose 6% to €329 million, equivalent to $381 million, aided by a decline in provisions for bad loans related to the pandemic. Analysts had forecast a profit of €280 million. Revenue rose 2%, mostly due to a strong performance from the bank’s asset-management business. Daniel Loeb’s Third Point LLC has taken a large stake in Royal Dutch Shell PLC and is urging the oil giant to separate into two companies to retain and attract investors as many flee stocks seen as environmentally unfriendly. The activist’s stake is worth well over $500 million, making it one of the Anglo-Dutch company’s largest investors, people familiar with the matter said.
U.S. stocks fell as investors examined earnings results from more of the biggest U.S. companies. Major indexes wavered between small gains and losses for most of the day's trading. The S&P 500 fell 0.5% as of the 4 p.m. close of trading in New York, a day after the broad stocks gauge closed at an all-time high for the 57th time this year. The Dow Jones Industrial Average-which also closed Tuesday at a record-was down 0.7%, while the technology-focused Nasdaq Composite Index was about flat. Solid earnings have quelled the investor concerns about supply-chain problems, inflation and Chinese economic growth that rattled markets at the start of fall. The S&P 500 is on course for its biggest monthly advance since November. Additional earnings reports released throughout the week will offer investors more clues about how companies are navigating shortages of workers and raw materials. General Motors Co. ’s net profit dropped 40% in the third quarter compared with a year earlier as the computer-chip shortage dented factory output, illustrating that a parts crisis that emerged nearly a year ago continues to drag down car-industry earnings. The Detroit auto maker, reporting record pricing and a lucrative mix of higher-profit SUVs and trucks, has been able to offset some of the challenges and said Wednesday its full-year profit would finish at the high end of its previous guidance. McDonald’s Corp. is raising menu prices to keep pace with rapidly growing costs, the company said, with wages alone up at least 10% so far this year at U.S. restaurants. The Chicago-based burger giant is struggling to recruit enough workers to serve customers as quickly as possible and keep its stores open at full hours, even as the chain offers higher pay, executives said.
After negative guidance from the US stock exchanges, the indices on the East Asian stock exchanges are heading downwards on Thursday, albeit often only moderately. One exception is Seoul, where the index is minimally up. Here, the 0.3 per cent gain of heavyweight Samsung Electronics is providing support after the company reported record sales and a 31 per cent rise in profits for the reporting quarter. The Nikkei index is down 0.9 per cent at 28,831 points.
Yields on the bond market fell sharply in the middle of the week. The yield on ten-year U.S. treasuries fell by 7.0 basis points to 1.54 percent on Wednesday.
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