By Abhijith Ganapavaram and Allison Lampert

April 24 (Reuters) -

Boeing ( BA ) on Wednesday reported an 8% decline in

quarterly revenue to $16.57 billion, the first drop in seven

quarters, as the U.S. planemaker slows production of its

strongest-selling jets following a January mid-air blowout.

The U.S. planemaker said its first-quarter cash burn, a

metric closely watched by investors, was $3.9 billion, compared

with negative $786 million a year ago.

But the planemaker in March had anticipated free cash

flow usage would be between $4 billion and $4.5 billion, higher

than they planned in January as Boeing ( BA ) wrestles with a

full-blown crisis that has led to a management shakeup.

Shares were flat in premarket trading after rising 3.6%

earlier.

Since the Jan. 5 accident on an Alaska Airlines-operated

jet, the Federal Aviation Administration has imposed a cap on

production of the company's strong-selling 737 MAX jets. The FAA

also has told Boeing ( BA ) to develop a comprehensive plan to address

"systemic quality-control issues."

CEO Dave Calhoun, who will step down around the end of

the year, said in a letter to employees earlier on Wednesday

that Boeing ( BA ) was "in a tough moment" in the near term. He

reiterated however that the company was deliberately slowing the

system to improve quality and safety.

"Lower deliveries can be difficult for our customers and

for our financials. But safety and quality must and will come

above all else," he added.

Reuters reported earlier this month that output of its

cash-cow 737 MAX had fallen sharply amid a step up in factory

checks by U.S. regulators.

Analysts have warned the slow pace of deliveries risks

delaying Boeing's ( BA ) financial and production goals. Boeing's ( BA ) CFO

said last month that the company will need more time to hit a

goal outlined in 2022 for an annual cash flow of about $10

billion by 2025 or 2026.

The goal is seen as a key milestone as Boeing ( BA ) works to

accelerate its recovery from an earlier crisis after two MAX

jets crashed in 2018 and 2019.

The company also expects a slower increase in the production

rate and deliveries of its 787 widebody jets as the U.S.

planemaker wrestles with supplier shortages "on a few key

parts," a memo showed on Monday.

However, demand for new planes remains strong amid

constrained production at Boeing ( BA ) and its rival Airbus, though

the European planemaker has increased its lead in the narrowbody

market in the first quarter.

Calhoun said Boeing ( BA ) would have "largely delivered" 737 and

787 in inventory by the end of the year, bringing in much-needed

cash. He added that its defense business, which has been losing

money in recent quarters, "will be progressing toward more

historical levels of performance."

Boeing ( BA ) delivered 67 737s in the quarter through March, down

41% from last year. Planemakers receive the bulk of the cash

upon delivery of the aircraft.

Adjusted loss per share narrowed to $1.13 from a loss of

$1.27.

(Reporting By Allison Lampert in Montreal and Abhijith

Ganapavaram in Bengaluru; Editing by Anil D'Silva and Chizu

Nomiyama)