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Boeing Chief Financial Officer Brian West said on Wednesday the company is concerned about President Donald Trump’s tariffs potentially constraining the availability of parts from its suppliers, although he said the U.S. planemaker has enough inventory for now. West, who was speaking at a Bank of America industrials conference, also said the company expected to take a one-time hit of $150 million to its first-quarter profit. The company’s balance sheet has suffered from low deliveries of commercial jets and cost overruns on fixed-price contracts for its defense and space division. Boeing’s cash flow could improve in the first quarter by “hundreds of millions” of dollars, he said. The company’s share price rose 6% after West’s comments. Tariffs will not likely dampen demand for the company’s jetliners, he said. Boeing has an order backlog of over 5,000 planes, most of which are 737s. Deliveries of the single-aisle jet in March should match February, when it delivered 31 MAX jets plus one P-8 Poseidon for the U.S. Navy, he said. Through March 18, the company has delivered 13 737s, according to a Barclays note. The company continues to make progress stabilizing 737 and 787 Dreamliner production, both of which have been dogged by quality and supply chain problems, and remains on track to increase monthly output this year of the MAX from the mid-20s now to 38 planes and the Dreamliner from five to seven jets per month, West told investors. Deliveries of its KC-46 tanker military aircraft were recently halted by the U.S. Air Force after cracks were discovered in parts of the wings on two aircraft awaiting delivery. West said Boeing is making progress on resolving the problem, deliveries for the year should not be affected and the halt will not result in a charge against its profit. Boeing will not be significantly affected this year by a fire at a SPS Technologies plant, which makes 10% to 15% of fasteners for the aerospace industry, he said, adding that the company is assessing the impact on its suppliers. The company is trying to sort out how to prevent longer-term constraints on the fasteners supply, he added. In the past two weeks, Boeing moved into the next stage of flight testing for its 777X, which resumed in January following a five-month pause, he said. The company has said it expects to begin deliveries of the long-delayed 777-9 next year, followed by the smaller 777-8 and a freighter version later in the decade. Developing a new airplane is “a ways off,” West said. Boeing is shopping two subsidiaries – its Jeppesen navigation unit and drone company Insitu. However, Boeing’s divestment strategy is focused on pruning, not restructuring the company, he said. It does not plan to sell Wisk Aero, which is developing autonomous air taxis, he said. Technology being pioneered by Wisk will be key to the future of autonomous flight and valuable to the rest of Boeing’s business, he added. “It’s small, it’s important, and we’re staying with it.” Dan Catchpole and Shivansh Tiwary, Reuters
Category:
E-Commerce
Following continuous trade tensions between the European Union and the United States, the European Commission moved forward with the enforcement of its digital antitrust rules on Alphabets Google and Apple. On Wednesday, the commission said in a press release that Alphabet treats its own services, such as shopping, hotel booking, transport, or financial or sports results, more favorably than other results offered by third parties, and that Alphabet displays its own services at the top of Google Search results with enhanced visual formats and filtering mechanisms. The commission noted that it informed Alphabet that its app marketplace, Google Play, does not comply with the Digital Markets Act (DMA), as app developers are prevented from steering consumers to other channels that may have better offers. Alphabet now has the opportunity to review the documents in the commission investigation file and respond. If the commission upholds its preliminary assessment, it would then issue a noncompliance decision. We will keep engaging with the Commission and comply with its rules,” Google said in a blog post. “But todays findings now increase the risk of an even worse experience for Europeans. The DMA is designed to regulate large platforms like Google, Apple, and Meta, and boost competition, but in reality, it is having the opposite effect by hurting European businesses and consumers.” In another press release, the commission specified the measures that Apple has to take to comply with certain aspects of its interoperability obligation. According to the commission, interoperability enables a deeper and more seamless integration of third-party products with Apple’s ecosystem and is the key to opening up new possibilities for third parties to develop innovative products and services on Apple’s gatekeeper platforms. The commission then outlined its recommendations for Apple to enhance the interoperability of its iOS devices with competitors’ products, such as headphones, smartwatches, and virtual reality headsets, in order to comply with the DMA. These included requiring Apple to improve the compatibility of third-party smartwatches and headphones with iPhone and iPad operating systems and simplifying the pairing process for users. Todays decisions wrap us in red tape, slowing down Apples ability to innovate for users in Europe and forcing us to give away our new features for free to companies who dont have to play by the same rules, the company said in a statement to the Wall Street Journal. The decisions on Apple and Google are just the latest of an escalating trade war between the U.S. and EU. On March 13, President Trump threatened to impose a 200% tariff on European alcoholic beverages in response to the EUs 50% tariff it imposed on American-made spirits. The EUs move came in retaliation to Trumps 25% tariffs on aluminum and steel, which took effect on March 12.
Category:
E-Commerce
The Federal Reserve held interest rates steady on Wednesday, as expected, but U.S. central bank policymakers indicated they still anticipate reducing borrowing costs by half a percentage point by the end of this year in the context of slowing economic growth and, eventually, a downturn in inflation. Taking stock of the Trump administration’s rollout of tariffs, Fed officials actually marked up their outlook for inflation this year, with their preferred measure of price increases expected to end the year at 2.7% versus the 2.5% pace anticipated in December. The Fed targets inflation at 2%. But they also marked down the outlook for economic growth for this year from 2.1% to 1.7%, with slightly higher unemployment by the end of this year. Policymakers said risks had increased, with a near unanimous sentiment in saying the outlook for the year was muddled. “Uncertainty around the outlook has increased,” the Fed said in a new policy statement that accounts for the first weeks of the new Trump administration and the initial rollout of what White House officials say will ultimately be global tariffs on imported goods. The Fed left its policy rate in the 4.25%-4.50% range. U.S. stocks extended their gains slightly after the release of the Fed’s policy statement and projections, with the Dow Jones industrial average up 0.5% and the tech-heavy Nasdaq Composite up 0.7%. U.S. interest rate futures priced in a cut of just over half a percentage point this year, with traders seeing a 62.1% chance of the Fed resuming rate cuts at its meeting in June, according to LSEG estimates, compared with a 57% chance before the announcement. The dollar pared some of its earlier gains, with an index of major currencies up 0.5%. U.S. Treasury yields also eased slightly, with the benchmark 10-year note yield up 1.7 basis points on the day to 4.298%. “The Fed is as lost in the wilderness as the rest of us trying to decipher the continual shifts in economic policy from 1600 Pennsylvania Avenue,” said Inflation Insights’ Omair Sharif, referring to the street address of the White House. “Beyond the cut to median growth this year and the boost to median inflation, the most telling aspect of the (projections) is the shift higher in uncertainty.” Lower growth, higher unemployment The Fed also said it will slow the ongoing drawdown of its balance sheet, known as quantitative tightening. Fed Governor Chris Waller dissented from the policy statement because of the change in balance sheet policy. The rate projections matched the expectations set by financial markets ahead of the meeting, and kept intact the Fed’s general outlook that gradually slowing inflation will allow further monetary policy easing. But it may be a rockier road getting there. While not mentioning President Donald Trump or tariffs in the statement, the Fed projections for higher inflation this year coincide with the unveiling of his tariff plans. It appeared, though, that the central bank for now is looking through the price shift involved in those import taxes, treating them as a one-off change rather than a persistent source of price pressures. Underlying inflation beyond 2025 was unchanged from the Fed’s projections in December, expected to return to 2% by the end of 2027. The projection for rate cuts beyond this year was also unchanged, hitting 3.1% by the end of 2027, near the level seen as having a neutral effect that neither encourages or discourages spending and investment. The Fed cut its benchmark interest rate by a full percentage point last year, but has kept rates on hold this year as it waits for further evidence that inflation will continue to fall, and, more recently, for more clarity about the impact of Trump’s policies. Compared to Trump’s promise of a coming economic “golden age” because of his push to impose tariffs, deport large numbers of immigrants and loosen regulations, the Fed’s outlook forecasts growth at 1.7% this year and just 1.8% in both 2026 and 2027, with the unemployment rate at 4.4% this year and 4.3% in 2026 and 2027. The unemployment projections are above the lows of recent years and the latest reading of 4.1% in February. Howard Schneider and Ann Saphir, Reuters
Category:
E-Commerce
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