Boeing Reports Larger Loss and Lower Revenue; Hires New CEO Amid Ongoing Struggles”

On Wednesday, Boeing revealed it will continue to deplete cash reserves this quarter, reporting a larger-than-expected quarterly loss and weaker revenue as its commercial airplane and defense programs continue to face difficulties.

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Boeing

The company also announced the hiring of Robert “Kelly” Ortberg, a veteran of the aerospace industry with over 30 years of experience, as its next CEO. This leadership change comes as Boeing seeks to stabilize and improve its operations.

For the second quarter, Boeing’s performance compared to estimates compiled by LSEG was as follows:

• Loss per Share: Adjusted loss of $2.90 per share versus an expected $1.97 per share.
• Revenue: $16.87 billion versus the anticipated $17.23 billion.

CEO Dave Calhoun acknowledged the challenging quarter, stating, “Despite a challenging quarter, we are making substantial progress strengthening our quality management system and positioning our company for the future.” Calhoun had previously announced that he would step down by year-end.

Boeing reported a significant net loss of $1.44 billion, or $2.33 per share, for the second quarter, compared to a loss of $149 million, or 25 cents per share, in the same period last year. On an adjusted basis, the company’s loss was $2.90 per share, missing analyst expectations by nearly $1 per share, according to LSEG.

Revenue for the three months ending June 30 declined by 15% to $16.87 billion. This decline is attributed to lower production and delivery rates, which have also pushed back some of Boeing’s financial targets. Boeing’s commercial airplanes unit saw a 32% year-over-year drop in revenue to $6 billion.

Boeing’s cash burn amounted to $4.3 billion in the second quarter. CFO Brian West noted on the earnings call that due to “near-term working capital pressures,” the third quarter is expected to continue to see cash outflows.

The company is also grappling with challenges related to its 737 Max jets. A door plug blowout incident earlier this year reignited regulatory scrutiny and further delayed deliveries of new, more fuel-efficient jets to airlines. Despite these issues, Boeing remains committed to increasing its Max production to 38 planes per month, up from the mid-20s per month in the previous quarter.

In summary, Boeing is navigating a difficult period with increased financial losses and ongoing production challenges. The appointment of Kelly Ortberg as CEO signals a new direction as the company aims to address these issues and stabilize its operations.