Boeing shares fly after first profit in two years

By Raffaele Redi

Boeing today announced its first profit after the scandal caused by two fatal 737 MAX crashes

Boeing 737                                 
Boeing 737
                                

Boeing today reported its first profit after the scandal caused by two fatal 737 MAX crashes as it posted a $0.5bn second-quarter net earnings/(loss) per share, compared to $2.4bn loss of the same period of the previous year, according to generally accepted accounting principles (GAAP).

Shares are on the move now, flying higher as the US plane-maker recovered from a $4.2 loss per share, posting earnings per share of $1.00 in 2021 second quarter, following a higher commercial volume and lower period costs.

Second-quarter revenue jumped to $17.0bn from $11.8bn recorded in 2020, driven by higher commercial aeroplanes and services volume, with an operating cash flow of $483m.

“While our commercial market environment is improving, we're closely monitoring COVID-19 case rates, vaccine distribution and global trade as key indicators for our industry's stability,” said Boeing’s president and CEO, David Calhoun.

737 MAX deliveries halved in 2021

Boeing expects to deliver fewer than half of the 787s currently in inventory this year, although it seems to continue making progress on the global return to service of the 737 MAX. 

Its unit, Commercial Airplanes, secured orders for 200 737 aircraft for United Airlines, 34 737 aircraft for Southwest Airlines and a total of 31 freighter aircraft.

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As the company reports, Commercial Airplanes delivered 79 aeroplanes during the quarter, and the backlog included over 4,100 aeroplanes valued at $285bn.

“Since the Federal Aviation Administration’s (AAA) approval to return the 737 MAX to operations in November 2020, Boeing has delivered more than 130 737 MAX aircraft, and airlines have returned more than 190 previously grounded aeroplanes to service,” says the company.

Stepping up production

Boeing reported that 737 programmes are currently producing at a rate of approximately 16 per month, and continue to expect to increase production gradually to 31 per month in early 2022, with further gradual increases to correspond with a rise in market demand.

“The company is conducting inspections and rework, and continues to engage in detailed discussions with the FAA on verification methodology for 787,” said the company.

Boeing further explained, “In connection with these efforts, the company announced earlier this month that it has identified additional rework that will be required on undelivered 787s.

“Based on our assessment of the time required to complete this work, Boeing is reprioritising production resources for a few weeks to support the inspection and rework. As that work is performed, the 787 production rate will temporarily be lower than five per month and will gradually return to that rate.”

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Further reading: Boeing stock price analysis: the stock may start a new uptrend within the next month

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