Boeing [BA] said Thursday it will take another after-tax charge on the KC-46 aerial refueling tanker program, this one costing $393 million.
The company said the charge, its fourth, reflects higher costs associated with previously announced program schedule and technical challenges. These include implementation of the hardware solution to resolve the refueling boom axial load issue identified during flight testing, delays in the certification process and concurrency between late-stage development testing and initial production.
Boeing has taken after-tax charges in April 2015 and 2016 for a total of nearly $1.4 billion.
“This additional investment in the KC-46 supports the delivery timeline for the initial production aircraft and our transition to full-rate production,” Boeing Chairman, President and CEO Dennis Muilenburg said in a statement. “We remain confident in the long-term value of the KC-46 for our customers and shareholders.”
Boeing completed a critical milestone in the KC-46 program last week when the tanker refueled an A-10, the last aircraft before its Milestone C decision. If the company earns approval from Pentagon acquisition czar Frank Kendall, it will proceed into low-rate initial production (LRIP) of 19 aircraft.
KC-46 isn’t the only program for which Boeing is taking charges. The company took a non-cash after-tax charge of $847 million ($1.33 per share) for the commercial 787 program after Boeing decided not to invest funds for the refurbishment and sale of the two remaining unsold flight test aircraft that were scheduled to be introduced into the modification line.
Boeing also took a $814 million after-tax charge ($1.28 per share) on its commercial 747 program, accounting for current and anticipated weakness in the air cargo market. The charge reflects a lower estimated total of 747-8 Freighter aircraft to be produced in the program accounting quantity and lower estimated revenues on future aircraft sales.
Boeing announces second-quarter results on Wednesday.