Boeing will be hard-pressed to meet ambitious profitability goal
While Boeing scrambles to contain the short-term fallout from two fatal jet crashes blamed partly on faulty software installed on its 737 Max jet, the crisis also casts doubt on a major strategic objective for the aerospace manufacturer.
Three years ago CEO Dennis Muilenburg set an audacious goal of doublingprofitability by the end of the decade. High profit margins from the flagship 737 were key to lifting operating margins from around 8 percent to the mid-teens. Now, with the 737 Max grounded and one analyst calling 2019 “a lost year” for financial performance, Muilenburg’s goal will have to wait.
“2020 is next year, so guess what? It’s not happening by next year,” says Cowen analyst Cai von Rumohr.