Boeing posts surprise profit as aircraft demand rebounds from pandemic slump

A Boeing 737 MAX airplane lands after a test flight at Boeing Field in Seattle, Washington, U.S. June 29, 2020.

Karen Ducey | Reuters

Boeing reported its first quarterly profit in almost two years on Wednesday, boosted by a surge in deliveries of commercial jetliners as airlines began recovering from a pandemic slump and sales rose in the company’s other divisions.

The plane manufacturer snapped six consecutive quarters of losses, swinging to a profit of $567 million for the second quarter from a net loss of $2.96 billion in the quarter a year ago as air travel was plunging early in the pandemic.

Boeing’s revenue rose 44% to nearly $17 billion from $11.8 billion a year earlier, beating analyst estimates of $16.54 billion.

Here’s how the company performed compared with analysts’ estimates complied by Refinitiv:

  • Adjusted EPS: 40 cents vs a per-share loss of 83 cents.
  • Revenue: $17 billion vs. $16.54 billion.

Boeing shares jumped 5% in premarket trading after the company reported results.

“While we still have a ways to go before a full rebound, it is encouraging to see the commercial market improving, enabled by continued vaccine distribution and increasing travel demand, particularly in domestic markets,” CEO Dave Calhoun said in an employee memo Wednesday. “Going forward, we will closely monitor case rates, vaccine distribution, travel protocols and global trade as key indicators for recovery.”

Boeing said last year it would slash jobs to about 130,000 employees by the end of 2021, but Calhoun said Wednesday it will likely remain at the current headcount of roughly 140,000 people because of the increase in demand.

Sales and deliveries of Boeing’s long-troubled 737 Max picked up in recent months with big orders from customers like United Airlines and Southwest Airlines, a vote of confidence in the plane that had been grounded worldwide until November because of crashes in 2018 and 2019 that killed 346 people. Regulators lifted the ban after Boeing made changes to a flight-control system implicated in the crash.

Revenue in its commercial airplane unit rose nearly 270% from a year earlier to $6.02 billion in the second quarter. But the segment still reported negative margins of 7.8%.

While sales and deliveries of the Max have increased the commercial airplane division is hamstrung by its wide-body 787 Dreamliner. Boeing slashed its delivery forecast for those planes earlier this month and said it would pause handovers to airlines for the second time in less than a year after finding another manufacturing flaw on the planes.

Revenue also grew in Boeing’s global services unit as air traffic grew and demand for freighter conversions increased to cater to a boom in air cargo.

Defense revenue, which has buoyed Boeing during the pandemic-induced lull in commercial airplane demand, rose 4% to $6.88 billion.

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