Boeing shares up 4% after posting an unexpected profit.
Boeing (BA) shares rose 4.2% on Wednesday after the most prominent US aircraft manufacturer posted its first profit in nearly two years.
For the second quarter ended June 30, Boeing reported earnings per share rose to $ 0.40, compared with an analytical forecast of loss per share of $ 0.81.
The profit was $ 587 million, after a loss of $ 2.38 billion in the same period last year when the airline suffered losses by paying compensation to airlines for grounding Boeing 737 Max aircraft. These aircraft have for more than 1.5 years around the world due to two plane crashes. It took Boeing months to fix errors in its computer flight control system and then recertification and audits.
Boeing’s total quarterly revenues grew 44% to $ 17 billion, above the Wall Street average of $ 16.6 billion. Boeing’s quarterly revenues and earnings statistics for the last two years are available here.
Boeing sales recover
Boeing’s largest commercial aircraft segment is still in dire straits since the pre-pandemic, but revenues have skyrocketed thanks to large orders from customers such as United Airlines (UAL) and Southwest Airlines (LUV).
Boeing’s commercial aircraft segment grew 268% y-o-y to $ 6.02 billion in quarterly aircraft deliveries from 20 to 79, exceeding analysts’ forecasts of $ 6.00 billion. However, the segment continued to show negative margins. (percentage of profit after deducting expenses) at 7.8%.
While resumed flights of the 737 Max in November following a decision by the Federal Aviation Administration (FAA) in the United States and elsewhere, the Chinese authorities still have not approved returning these aircraft to service.
In addition, sales growth by the suspension of deliveries of the 787 Dreamliner wide-body aircraft due to a manufacturing error.
Defense, space, and military orders revenues rose 4% to $ 6.88 billion, also beating expectations of $ 6.78 billion. As a result, the defense orders segment’s profitability rose from 5.6% last year to 13.9%.
Boeing Global Services’ revenues also rose 17% to $ 4.07 billion, exceeding expectations of $ 3.69 billion, driven by growth in air passenger traffic and increased demand for retooling cargo aircraft. The profitability of the service division risen from 11.9% to 13.1%.
The expert expects that shortly, the company’s revenues will be affected by the wave of deliveries of 737 Max from Southwest Airlines.
Boeing plans to increase production rates.
In the context of the gradual recovery of the aviation industry, Boeing decided not to reduce the staff to 130,000 people but to keep at the current level of about 140,000 people.
The company said it currently produces 16 737 MAX aircraft per month but plans to gradually increase this to 31 units per month by early next year.
Overall, analysts have noted a slight decrease in the number of Boeing problems but indicate that the industry will take two years or more to recover to levels close to “pre-pandemic.”
In addition to the risks of new strains of COVID-19, Boeing faces the challenges of US-China international relations and growing competition from the French Airbus, taking global leadership and market share from Boeing. Airbus is due to report its quarterly results on Thursday.
