Boeing's Earnings Call Tomorrow (?) -- January 31, 2024

Locator: 46702BOEING.

I don't know if the NY Times will keep this behind a paywall or not. We subscribe to the NYT so we have access.

Link here.

The headline:

The lede:

Less than four weeks after a hole blew open on a Boeing 737 Max 9 jet during a flight, company executives face a thorny question: Should they emphasize safety or financial performance?

The issue is looming as Boeing prepares to report its fourth-quarter earnings on Wednesday amid its most significant safety crisis in years. With the Jan. 5 incident on a Max 9 flight still under investigation, executives are grappling with how much to discuss quality control while also reassuring shareholders that the company is protecting their investment, according to two people with knowledge of the matter.

The National Transportation Safety Board is expected in the coming days to release a preliminary report on the incident, which occurred on an Alaska Airlines flight. The report could shed more light on how a panel blew off the Max 9 and will almost certainly ramp up scrutiny of Boeing by lawmakers, airlines and safety groups.

Dave Calhoun, Boeing’s chief executive, is expected to speak about safety during the company’s call with investors on Wednesday morning after the release of its earnings report, one of the people said. But it is not clear what balance he and other executives will strike in their comments as they try to contain the fallout from the Max 9 incident.

The subject has taken on new significance after news accounts, including a report in The New York Times, that Boeing workers opened and then reinstalled the panel, known as a door plug. The plug tore away from the Alaska plane shortly after takeoff from Portland, Ore. That revelation suggests that the incident — which terrified passengers and forced the pilots to make an emergency landing — may have been caused by lapses at a Boeing factory in Renton, Wash.

Some aviation experts and executives have long said Boeing’s safety problems and its financial performance are intertwined. The company, these people say, has for many years put too much emphasis on increasing profits and enriching shareholders with dividends and share buybacks, and not enough on investing in engineering and safety

I saw the CNBC interview with the CEO of Boeing this morning -- I think he was practicing what he planned to say during the earnings call tomorrow. But this should be a no-brainer -- the answer to the question that Sydney Ember asked.

Dave Calhoun has already provided guidance for the next quarter and says he won't "pull it" or change it.

He made that very, very clear in the CNBC interview.

He needs to devote the entire earnings call to safety. In a situation like this, there's no reason for any mention of dollars and cents, or dollars or cents. It's all about safety. 

And anyway, Boeing has lost 50% of its value in the last five years -- Boeing's shares reached their all-time high of $420 (or thereabouts) in very early 2019; today it's worth $210. 

Everyone will be watching (and listening) tomorrow. It will be interesting to see if Calhoun will be able to stay on message.

By the way, Jim Cramer hit the bull's-eye when he interviewed Calhoun this morning. Calhoun couldn't cross that bridge. Sad.