Today’s Pickup: Boeing 737 groundings to cost company $1 billion

Good day,

After two deadly crashes involving its 737 MAX rattled the company, Boeing (NYSE: BA) is expected to report its earnings Wednesday, highlighting the financial toll of the flawed aircraft.  

Investors and analysts will be looking for information from Boeing on software updates for the 737 MAX, as well as any additional information on the crashes. Due to the worldwide grounding of the aircraft as well as halted deliveries, Boeing’s commercial aircraft revenue is expected to fall 7.5 percent to $12 billion.

Boeing said it would take an initial hit of more than $1 billion on the global grounding of the 737 MAX jetliner following two fatal crashes. The company suspended full-year financial guidance.

Did you know?

As additional tariff increases were announced and expected peak season volumes started materializing into truckload demand within these markets, tender rejections (OTRI.LAX and OTRI.SAV) both started to decline, with the only increases coming as the last wave of tariff-driven volumes arrived in November and December of 2018. This decline in tender rejections has continued through today, with a total decline of -82% year-over-year in both markets.

Read the full article on FreightWaves

Quotable:

“I don’t think we’re even close to the middle of that journey. We’re still at just the beginning of that journey.”

— Nick Brown, director of marine, Lloyd’s Register

In other news:

America’s big deficits are solving a big problem for markets

Warning signs are flashing globally, and that translates into demand for safe assets. (Bloomberg)

Uber chooses Citadel Securities to handle its IPO

Ride-hailing company picks electronic-trading giant as its designated market maker ahead of debut on NYSE. (WSJ)

Europe not feeling much pain from Trump tariffs, Central Bank says

The actual damage to European exports has been surprisingly mild, according to a study. (NYT)

The US-China trade war’s effects on truckload supply and demand in major West Coast and East Coast port markets

The inbound container flows had a big impact on freight volumes in the port cities of Savannah and Los Angeles this past year. (FW)

Final thoughts:

Knight-Swift Transportation Holdings, Inc. (NYSE: KNX) reported first quarter 2019 adjusted earnings of $0.55 per share compared to analysts’ expectations of $0.52 per share. Adjusted earnings per share (EPS) were $0.11 per share higher year-over-year.

The largest truckload (TL) transportation company in North America generated $1.2 billion in total revenue, down 5.2 percent year-over-year, lower than the $1.31 billion consensus estimate. Revenue, excluding fuel surcharges, declined 4.1 percent year-over-year. The revenue decline (excluding surcharges) was attributable to the 4.7 percent decline in revenue in the truckload segment (revenue increased 1.3 percent in the logistics division and intermodal revenue increased 5 percent).

From the company’s press release, “Our revenue per loaded mile, excluding fuel surcharge and intersegment transactions, increased 9.4 percent compared to the first quarter of 2018. This was partially offset by an 8.7 percent decrease in miles per tractor and a 3.6 percent decrease in average tractor count, compared to the first quarter of 2018.”

Read the full article on FreightWaves.

Hammer down everyone!