Boeing Sinks After Saying It Halted 737 MAX Deliveries

Boeing (NYSE: BA) shares fell in after-hours Thursday trading after the U.S. aerospace and defense titan disclosed it was forced to pause deliveries of some 737 MAX planes due to incorrectly installed parts.

As a result, Boeing warned the disruption will create a material impact on its near-term deliveries of several of its products, including the 737 MAX 7, 737 MAX 8, MAX 8-200, and P-8 planes. 

The company is in regular contact with the Federal Aviation Administration over the issue after one of its suppliers notified it that two parts at the back of the plane were incorrectly installed.

Spirit AeroSystems (NYSE: SPR) confirmed it was the supplier, sending its shares over 11% lower in pre-market Friday trading. 

“Spirit is working to develop an inspection and repair for the affected fuselages. We continue to coordinate closely with our customer to resolve this matter and minimize impacts while maintaining our focus on safety,” the company said.

This marks another setback for Boeing after the company was forced to temporarily halt delivery of 787 and 767 jets earlier this year due to issues with certain parts, as well as regulatory problems. 

The setback comes just a few days after Boeing said it managed to deliver 64 jets in March, which marked its best month since December. This number includes 7 787 Dreamliners, whose deliveries were paused in March due to a data-analysis issue. 

The vast majority of planes delivered in March consisted of 737 Max jets. On the demand side, Boeing reported 38 net orders.

For the entire first quarter, Boeing delivered 130 jets, including 113 737 units.

Boeing is due to report its first-quarter results on April 26 and could discuss the deliveries halt during the earnings call. The company’s stock is up 12.1% year-to-date.