Boeing Stock Plunges 7% on China Delivery Halt

Boeing (NYSE:BA) has recently stopped delivering aircraft to China due to a request from the country's aviation regulator for additional certification documentation. This documentation concerns the batteries in cockpit voice recorders installed in all Boeing models, including the 787 and 737 Max.

This suspension has financial repercussions for Boeing, with the company's Chief Financial Officer indicating a potential negative impact on second-quarter cash flow. Consequently, Boeing's shares fell by more than 7% yesterday.

Speaking at the Wolfe conference, Boeing's CFO noted that second-quarter cash flow might decline compared to the first quarter due to the continued halt in aircraft deliveries to China, a key market for Boeing. The company expects 787 deliveries in the second quarter to be on par with those in the first, indicating no short-term improvement.

In addition to the China delivery issue, Boeing faces persistent supply-chain challenges for the 787 model, which could further hinder production and delivery increases. The CFO also mentioned that margins in the defense segment are expected to be negative in the second quarter.

As a result, Boeing forecasts that second-quarter deliveries will remain close to first-quarter levels, with no significant increase anticipated.