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CNBC
4 hours ago
- CNBC
'He's showing up.' Things are getting better at Boeing under CEO Ortberg. Can he keep it going?
After spiraling from crisis to crisis over much of the past seven years, Boeing is stabilizing under CEO Kelly Ortberg's leadership. Ortberg, a longtime aerospace executive and an engineer whom the manufacturer plucked from retirement to fix the problem-addled company last year, is set this week to outline significant progress since he took the helm a year ago. Boeing reports quarterly results and gives its outlook on Tuesday. So far, investors are liking what they've been seeing. Shares of the company are up more than 30% so far this year. Wall Street analysts expect the aircraft manufacturer to halve its second-quarter losses from a year ago when it reports. Ortberg told investors in May that the manufacturer expects to generate cash in the second half of the year. Boeing's aircraft production has increased, and its airplane deliveries just hit the highest level in 18 months. It's a shift for Boeing, whose successive leaders missed targets on aircraft delivery schedules, certifications, financial goals and culture changes that frustrated investors and customers alike, while rival Airbus pulled ahead. "The general agreement is that the culture is changing after decades of self-inflicted knife wounds," said Richard Aboulafia, managing director at AeroDynamic Advisory, an aerospace consulting firm. Analysts expect the company to post its first annual profit since 2018 next year. "When he got the job, I was not anywhere as near as optimistic as today," said Douglas Harned, senior aerospace and defense analyst at Bernstein. Ortberg's work was already cut out for him, but the challenges multiplied when he arrived. As the company hemorrhaged cash, Ortberg announced massive cost cuts, including laying off 10% of the company. Its machinists who make the majority of its airplanes went on strike for seven weeks until the company and the workers' union signed a new labor deal. Ortberg also oversaw a more than $20 billion capital raise last fall, replaced the head of the defense unit and sold off its Jeppesen navigation business. Ortberg bought a house in the Seattle area, where Boeing makes most of its planes, shortly after taking the job last Augustand his presence has been positive, aerospace analysts have said. "He's showing up," Aboulafia said. "You show up, you talk to people." Boeing declined to make Ortberg available for an interview. Boeing's leaders hoped for a turnaround year in 2024. But five days in, a door-plug blew out of a nearly new Boeing 737 Max 9 as it climbed out of Portland. The almost-catastrophe brought Boeing a production slowdown, renewed Federal Aviation Administration scrutiny and billions in cash burn. Key bolts were left off the plane before it was delivered to Alaska Airlines. It was the latest in a series of quality problems at Boeing, where other defects have required time-consuming reworking. Boeing had already been reeling from two deadly Max crashes in 2018 and 2019 that sullied the reputation of America's largest exporter. The company in May reached an agreement with the Justice Department to avoid prosecution stemming from a battle over a previous criminal conspiracy charge tied to the crashes. Victims' family members slammed the deal when it was announced. For years, executives at top Boeing airline customers complained publicly about the manufacturer and its leadership as they grappled with delays. Ryanair CEO Michael O'Leary told investors in May 2022 that management needed a "reboot or boot up the arse." Last week, O'Leary had a different tune. "I continue to believe Kelly Ortberg, [and Boeing Commercial Airplane unit CEO] Stephanie Pope are doing a great job," he said on an earnings call. "I mean, there is no doubt that the quality of what is being produced, the hulls in Wichita and the aircraft in Seattle has dramatically improved." United Airlines CEO Scott Kirby cast doubt over the Boeing 737 Max 10 after the January 2024 door-plug accident, as the carrier prepared not to have that aircraft in its fleet plan. The plane is still not certified, but Kirby has said Boeing has been more predictability on airplane deliveries. Still, delays for the Max 10, the largest of the Max family, and the yet-to-be certified Max 7, the smallest, are a headache for customers, especially since having too few or too many seats on a flight can determine profitability for airlines. "They're working the right problems. The consistency of deliveries is much better," Southwest Airlines CEO Bob Jordan said in an interview last month. "But there's no update on the Max 7. We're assuming we are not flying it in 2026." Boeing under Ortberg still has much to fix. The FAA capped Boeing's production at 38 Maxes a month, a rate that it has reached. To go beyond that, to a target of 42, Boeing will need the FAA's blessing. Ortberg said this year that the company is stabilizing to go beyond that rate. Manufacturers get paid when aircraft are delivered, so higher production is key. "I would suspect they would be having those discussions very soon," Harned said. "It's 47 [a month] that I think is the challenging break." He added that Boeing has a lot of inventory on hand to help increase production. Its defense unit has also suffered. The defense unit encompasses programs like the KC-46 tanker program and Air Force One, which has drawn public ire from President Donald Trump. Trump, frustrated with delays on the two new jets meant to serve the president, turned to a used Qatari Boeing 747 to potentially use as a presidential aircraft, though insiders say that used plane could require months of reoutfitting. Ortberg replaced the head of that unit last fall. "They're not totally out of the woods," Harned said. Boeing and Ortberg also need to start thinking about a new jet, some industry members said. Its best-selling 737 first debuted in 1967, and the company was looking at a midsize jetliner before the two crashes sent its attention elsewhere. "Already there's been a reversal from 'read my lips, no new jet.' I would like to see that accelerate," Aboulafia said. "He is the guy to make that happen."
Forbes
4 hours ago
- Forbes
Will AI Start To Figure Us Out? The Rise Of Intelligent Systems
Cheerful Asian gamer celebrating his success after winning in video game over PC in gaming club. We hear a lot about AI agents these days, next-gen engines that are able to, in limited ways, act like humans and tackle tasks. But what about intelligent systems? The intelligent system is something distinctly different from an agent, including in terms of the game theory that's applied. Where an individual AI agent might compete with a human worker, for example, the intelligent system will seek to interact with dozens, or hundreds, or thousands of humans, and in some way, build capacity based on those interactions. Defining The Intelligent System You can get a concise definition of an intelligent system from this resource at GeeksforGeeks: 'Intelligent systems in artificial intelligence (AI) represent a broad class of systems equipped with algorithms that can perform tasks typically requiring human intelligence. These systems span various domains from robotics to data analysis, playing a pivotal role in driving innovation across industries. Here, we delve into the essence of intelligent systems, their core components, applications, and the future trajectory of this transformative technology.' Authors provide the following list of prime aspects of intelligent systems: You start to get a picture of how these systems might work, at least in theory. The intelligent system is working with us every day, learning at a global level, and applying its knowledge base to a wider world than the typical AI agent would have access to. That's especially true in these early days of edge AI, where the agent can be installed on a non-connected, decentralized edge device. FEATURED | Frase ByForbes™ Unscramble The Anagram To Reveal The Phrase Pinpoint By Linkedin Guess The Category Queens By Linkedin Crown Each Region Crossclimb By Linkedin Unlock A Trivia Ladder Intelligent Systems in Gaming Mike Ambinder has been in the gaming industry for 20 years. He's an R&D partner at NEURAO, and has an evolved theory of how AI works in gaming and beyond. In a recent TED Talk, Ambinder broke down some of these key concepts. First, he contrasted games, with their interactivity, to other forms of digital experience: you listen to music, he pointed out, and you watch TV and movies, but you play games. That's different. By way of explanation, Ambinder broke things down into a linear process of a behavior that goes into a system and generates a response, and the cycle continues. He also mentioned a term, 'avoidances,' that represents, in his explication, the functions that are offered by a system. What do you get with an intelligent system built for interaction? I'll put these in bullet points: A System with Goals Ambinder further explained that an intelligent system has a systemic intention that is 'goal-directed.' In other words, the system has its own greater purpose. That's a hard concept to get your mind around, but in the age of semi-sentient AI, why not? An intelligent system can also have incredible, far-reaching powers of surveillance. 'You can record everything,' Ambinder noted. Intelligent Systems and Knowledge Generation Engines Ambinder also described processes whereby an intelligent system can make sense of the data that it collects in what he framed as an 'adaptive experience.' 'Instead of the player figuring out the game, the game can figure out the player,' he said. That seems to be at the heart of this concept: that as you play, you, as the player, are not the only thinking party. The game will be looking to figure you out, getting more information about who you are, what you want, and how you act, as you play. Use Cases for Intelligent Systems Ambinder enumerated these key areas of use: For example, he talked about treating PTSD, and how an intelligent system might be applied. When you think about how these gaming ideas apply to AI, you start to see the ability to put everything in play, and have an intelligent system working on us, figuring us out, to some particular end. Presumably, it's the owner of the system, probably a company or government agency, that's going to benefit. Let's make sure we talk about the rules for these evolved systems before we put them into implementation.
Yahoo
8 hours ago
- Yahoo
Jim Cramer to Kohl's Short Sellers: 'Cover and Move On.'
Kohl's Corporation (NYSE:KSS) is one of the stocks that Jim Cramer looked at. During the episode, Cramer suggested that the short sellers cover their shorts and 'move on.' He commented: 'It all started on social media. I saw it on Reddit's Wall Street Bets section, it's time to buy the stock of Kohl's. Why? Because of the gigantic short position… It was all about the short position, which is close to 50%… of the float, yet nearly half of the shares that trade were sold short. Whenever you have such a huge short position, it's easy for buyers to get together online and orchestrate a short squeeze, defenestrating the hedge funds that are shorting it, to which I say, what the heck do the shorts, not the memesters, but the shorts think they're doing here?… This chain with the balance sheet that isn't all that bad simply should not be that heavily shorted down here. It's moronic. Kohl's may not be great, but it isn't terrible either… A man in black suit holding a tablet looks at stock market data on a monitor. Photo by Tima Miroshnichenko on Pexels Kohl's (NYSE:KSS) is an omnichannel retailer offering apparel, footwear, beauty, accessories, and home products through physical stores and online. While we acknowledge the potential of KSS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
