Boeing posts wider-than-expected loss, names new CEO
By Josh White
Date: Wednesday 31 Jul 2024
(Sharecast News) - Boeing reported a wider-than-expected loss for its second quarter on Wednesday, as ongoing challenges in both its commercial and defence divisions led to weaker-than-anticipated financial results.
The aerospace giant posted a net loss of $1.44bn, or $2.33 per share, with an adjusted loss per share of $2.90, significantly missing analyst expectations.
Revenue for the quarter also fell short, declining 15% year-over-year to $16.9bn, compared to the $17.46bn analysts had predicted.
The company's struggles were underscored by a substantial decline in commercial aircraft deliveries, with only 92 planes delivered during the quarter, a 32% drop from the same period last year.
That was largely driven by setbacks in the 737 MAX program, which had been under increased regulatory scrutiny following a door plug blowout on an Alaska Airlines flight in January.
Despite the issues, Boeing reaffirmed its goal to ramp up 737 MAX production to 38 planes per month by the end of the year.
Boeing's defence sector also faced significant challenges, reporting a $913m loss, nearly double the loss from the same quarter in 2023.
That was put down to higher-than-expected costs and delays in several key programs, including the KC-46A tanker and T-7A trainer, both of which suffered from technical and supply chain issues.
Boeing recorded a negative free cash flow of $4.3bn, bringing its total cash burn for the first half of the year to over $8bn.
The firm's debt also increased, reaching $57.9bn by the end of the quarter, driven by a $10bn new debt issue.
Amid the challenges, Boeing announced a leadership change, naming Kelly Ortberg, a seasoned aerospace executive, as its new chief executive officer.
Ortberg, who previously led Rockwell Collins, will take over on 8 August , succeeding Dave Calhoun.
Looking ahead, Boeing was staring down a number of ongoing legal challenges, including a recent plea deal related to the 737 MAX crashes, which was contested by the families of victims.
Boeing withdrew its full-year outlook earlier in the year.
"Despite a challenging quarter, we are making substantial progress strengthening our quality management system and positioning our company for the future," said president and chief executive officer Dave Calhoun.
"We are executing on our comprehensive safety and quality plan and have reached an agreement to acquire Spirit AeroSystems.
"While we have more work ahead, the steps we're taking will help stabilise our operations and ensure Boeing is the company the world needs it to be.
"We are making important progress in our recovery and will continue to build trust through action and transparency."
At 0921 EDT, shares in the Boeing Company were up 0.98% in premarket trading in New York at $188.70.
They closed 0.77% firmer ahead of the results announcement on Tuesday at $186.86.
Reporting by Josh White for Sharecast.com.
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