Global groundings of Boeing 737 Max lower company's profit, revenue in first quarter

Boeing hinted Wednesday at the financial jolt arising from the global grounding of its 737 Max following two deadly crashes, and while the aerospace giant said it was making "steady progress" on a fix, it didn't predict when the jets will return to the skies.

The company reported a $1 billion increase in production costs connected to the 737 Max defect and warned that the crisis would force it to revise its earnings expectations for the full year. Just how much the grounding would eventually cost is yet to be determined.

CEO Dennis Muilenburg said fixing the Max and having the changes recertified is the company's top goal.

"We are very, very focused on the safe return of service of the Max," he said

He said engineers have taken 135 flights with software changes aimed at eliminating a repeat of events that appear to have led to the two crashes, totaling 230 hours of flight time. The software, he said, is nearing review by the Federal Aviation Administration for approval.

"We're very confident that when the fleet comes back, the Max will be one of the safest airplanes ever to fly," Muilenburg said.

Boeing recorded revenue of $22.9 billion in the first quarter, down 2% from a year earlier and nearly matching S&P Global Market Intelligence expectations of $23 billion.

The manufacturer posted net earnings of $2.15 billion, exceeding expectations of $2 billion but down 13.2% from a year earlier.

The company's 737 Max planes were grounded in March after an Ethiopian Airlines crash that killed all 157 people aboard and a Lion Air crash in Indonesia that killed all 189 people onboard.

Muilenburg has apologized and acknowledged that a maneuvering system contributed to the crashes.

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The company said it will also roll out "a robust package of training and educational resources."

Boeing said it would eventually revise its projected earnings for 2019 based on the 737 Max grounding but not yet "due to the uncertainty of the timing and conditions surrounding return to service."

Boeing shares were flat in pre-market trading at $374.

The company delivered 149 commercial airplanes in the first quarter, down from 184 a year ago, reflecting the impact of the 737 Max. As a result, commercial airplane revenue fell 8.7% to $11.8 billion.

The company said it saw higher fixed costs now that it has cut production of the 737 Max to 42 a month, down from 52, during the grounding. Boeing has more than 4,400 back orders for 737s and it is sold out through early next decade, investors were told Wednesday. 

The $1 billion in Max-related costs doesn't include software development, among other things, and the company is working with its 600 suppliers to try to minimize the impact. "When we come back and ramp (up production), we are going to do it in steady fashion," said Chief Financial Officer Greg Smith.

Besides the FAA and other regulators, Boeing said it is trying to stay in close contact with airlines that fly the Max, doing their best to minimize the impact of the groundings on passengers.

"We have deep regret for the impact this has had on their operations," Muilenburg said. Almost 90% of the airlines who fly the plane have had their pilots participate in sessions in simulators so they could see the software changes being rolled out first hand.

Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.