Boeing lost more money than analysts expected. The company blamed Air Force One. Specifically, a $280 million charge on a program that was supposed to deliver two modified 747s to carry the president.
The planes were ordered in 2018. They are not finished. Boeing keeps taking charges. This one brings the total loss on the program to over $2 billion. The company agreed to a fixed-price contract. Trump negotiated it. He bragged about saving taxpayers money. Boeing is now eating the difference between what it costs to build presidential jets and what seemed like a good idea at the time.
Retail traders saw the earnings miss and bought the dip. They always buy the dip. Boeing could announce it's pivoting to selling essential oils and someone would post rocket emojis. The thesis is simple: planes go up, stock goes up. Nobody asks why it takes eight years to modify two aircraft. Nobody wonders what a $280 million charge means in quarter sixty-three of this project. They just see a brand name and a discount.
The Air Force One program is a perfect snapshot of defense contracting. Promise a price. Miss every deadline. Blame complexity. Take charges every quarter until people stop counting. The planes will eventually fly. The president will wave from the door. Boeing will have lost enough money to buy a small airline. Everyone will call it a success because the alternative is admitting the system is a joke.
Analysts adjusted their price targets. They remain cautiously optimistic. This means they have no idea what happens next but need to publish something. Boeing's stock dipped, then recovered, then dipped again. Traders called it volatility. The technical term is guessing.
The next earnings call will feature another charge on Air Force One, and retail will buy that dip too, convinced they're investing in American manufacturing instead of funding the world's most expensive way to avoid admitting you f*cked up a bid.
Photo by Nick Morales on Unsplash
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