Latest news with #KellyOrtberg
Yahoo
an hour ago
- Business
- Yahoo
Boeing Touts Turnaround Year as Embattled Aerospace Giant Cuts Costs
This time last year, the state of Boeing was basically an inflamed, giant pile of cash doused in jet fuel. The company, mired in too many scandals and setbacks to print, lost nearly $12 billion when all was said and done in 2024. On Tuesday, the makings of a turnaround came into focus. In its latest earnings report, Boeing bested Wall Street expectations, slashed losses, and left behind the astronomical cash-burning furnace that ravaged its balance sheet for a few too many quarters. READ ALSO: Bottom Line Undercuts Hot Quarter for Top-Line US GDP and Evercore's Purchase of Robey Warshaw May Birth Trans-Atlantic M&A Titan Rerouting and Regaining Altitude A $176 million operating loss in the three months ended June 30 would not merit handing out party blowers around the boardroom table at most companies, but most companies didn't suffer $1 billion in operating losses during the same period a year earlier. Boeing reduced that gap by taking revenue to cruising altitude at $22.75 billion, 35% better than the second quarter of last year. Both figures, as well as a $433 million loss factoring in one-time items, were better than Wall Street analysts expected. This time last year, Boeing's bottom line was hindered by a slowdown in production after a door plug on an Alaska Airlines 737 Max jet blew out in January 2024. In response, the Federal Aviation Administration imposed a production cap of 38 on the jetliner model while investigating Boeing's production standards, adding to the reputational damage from years of bad headlines about crashes, layoffs, multiple CEO resignations, a worker strike and more. A turnaround effort led by new-ish CEO Kelly Ortberg, whose first anniversary on the job is next month, has made considerable progress addressing two major concerns: First of all, Boeing is delivering: 150 airplanes in the three months ending June 30, its best quarter since 2018 (coincidentally the last year Boeing made an annual profit). While Boeing is still subject to the production cap on 737 Max jets and has not yet sought a reprieve from the FAA, whose leader said last week the agency must look at Boeing's entire supply chain before making any adjustments, Ortberg has said the company could produce up to 47 a month. Second, and perhaps most important, Boeing's cash burn, the amount of reserves spent to fund operations, fell to $200 million in the second quarter. In the first quarter, Boeing's cash burn was $2.3 billion, a drop in the bucket compared with the second quarter last year, when it was an eye-popping $4.3 billion. A Timely Reminder: Boeing's not out of the woods yet, and investors made that clear on Tuesday, sending the company's shares down 4.4%. In a reminder of its past run of scandals, the second-quarter earnings were dragged down by a $445 million charge for a deal made with the Justice Department to avoid prosecution over two deadly 737 Max crashes. Boeing also revealed Tuesday that it doesn't expect certification of its Boeing 737 Max 7 and the Max 10 — the smallest and largest Max planes — until 2026, later than Ortberg had previously suggested. Boeing's defense business, which did not book any charges on its fixed-price contracts for the first half-year since 2019, is also staring down an unpleasant reminder of past troubles: A factory worker strike, similar to the one that crimped production of commercial jets last year, could hit the unit after employees voted down a new contract on Sunday. This post first appeared on The Daily Upside. To receive delivering razor sharp analysis and perspective on all things finance, economics, and markets, subscribe to our free The Daily Upside newsletter.
Yahoo
21 hours ago
- Business
- Yahoo
Higher Deliveries Help Boost Revenue and Cut Losses at Boeing
Key Takeaways Boeing beat revenue estimates and reduced its loss as deliveries rose. Deliveries of the plane maker's key 737 passenger jet jumped to 104, up from 79 in 2024. Boeing's Defense, Space & Security and Global Services units also posted higher (BA) posted better-than-expected sales and it slashed its red ink as deliveries increased. The planemaker reported second-quarter revenue jumped 35% year-over-year to $22.75 billion, while analysts surveyed by Visible Alpha were looking for $21.67 billion. Boeing also cut its core, or adjusted, per-share loss to $1.24 from $2.90 a year ago. Commercial deliveries soared 63% to 150, helping the Commercial Airplanes unit's revenue to skyrocket 81% to $10.87 billion. The company credited the gains to its flagship 737, which made up 69% of the total. The 104 737 deliveries were 34 more than in 2024. Defense, Space & Security segment revenue was up 10% to $6.62 billion, and it rose 8% to $5.28 billion at the Global Services division. Alluding to the problems Boeing has faced with production and quality issues, CEO Kelly Ortberg said the company remains "focused on restoring trust and making continued progress in our recovery while operating in a dynamic global environment." Shares of Boeing were at their highest level since January 2024 at the close of trading yesterday, and while they initially jumped today, they turned lower and were down 3% an hour after the opening bell. Still, they've added about 30% of their value this year. Read the original article on Investopedia Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
a day ago
- Automotive
- Business Insider
Boeing faces fresh delays to new versions of its wildly popular 737 Max as it doubles down on its safety focus
A pair of upcoming variants of Boeing's most popular plane, the 737 Max have been further delayed to 2026, CEO Kelly Ortberg confirmed in an earnings call Tuesday. Achieving certification for the Max 7 and Max 10 will be a key benchmark for Ortberg, who is approaching one year at the helm and has been leading Boeing's turnaround. The company had initially hoped the Max 7, the shortest version of the flagship narrow-body jet, would be certified in 2022. However, it has been constrained by work on the engine anti-ice system, a key safety feature that prevents ice from building up during cold weather conditions and at high altitude. "Work on the solution is taking longer than expected, and we now are expecting certification in 2026," Ortberg said on the second-quarter earnings call. The delay was first reported last week by industry publication The Air Current. Back in 2023, the Federal Aviation Administration warned that the system could cause the engine to overheat — and potentially result in debris breaking off and hitting the plane. Boeing then requested an exemption, saying an engine breakup is "extremely improbable," but withdrew this request in January 2024 as it faced a safety crisis in the wake of the Alaska Airlines blowout. Figuring out a solution for the complex system has been far from straightforward. Ortberg told investors on Tuesday that Boeing has been exploring different design paths. "We found some issues with the design implementation we had, so we're going to have to back up and make some additional design changes to get through that de-icing requirement," he said. "Basically, the engineering designs have not yielded in the time frame that we were anticipating, and so we still have work to do." His comments came after Ryanair's earnings call last week, when CEO Michael O'Leary said Boeing's commercial airplanes chief wrote to confirm the airline's first 15 Max 10s would be delivered in the spring of 2027. Meanwhile, Boeing is also working to certify the 777X — a twin-engine wide-body jet, also years behind schedule. It's now expected to enter service in 2026 as well. "Flight testing continues with no new technical issues to report," Ortberg said during the earnings call. Boeing reported quarterly revenues above expectations of $22.7 billion, with a net loss of $612 million. It's been ramping up production of its cash-cow 737 Max, reaching the 38-a-month limit imposed by the FAA. Its share price fell about 4% on Tuesday, but is still up more than 30% since the start of the year.
Yahoo
2 days ago
- Business
- Yahoo
Boeing CEO says defense business can weather looming worker strike
Boeing CEO Kelly Ortberg said Tuesday he's not worried about the impact of an impending strike that would include 3,200 union workers that produce fighter aircraft and munitions at factories in Missouri and Illinois. The threat of a strike follows the employees' rejection Sunday of Boeing's most recent contract proposal. The International Machinists and Aerospace Workers Union said in statement a strike could begin Aug. 4 if the parties don't reach a deal before the end of a weeklong cooling off period. Ortberg noted during the company's second quarter earnings call that the scope of the potential strike — which includes mechanics in plants in St. Louis and St. Charles, Missouri — would be much smaller than that of the 30,000-worker strike last fall. During that strike, the company took a $661 million charge on its KC-46 tanker development contract with the U.S. Air Force, in part due to work stoppages on the Air Force's KC-46 tanker. 'We'll manage through this,' he said. 'I wouldn't worry too much about the implications of the strike.' Along with the KC-46, Boeing holds contracts for several major Defense Department programs, including the Air Force's F-47 and F-15EX fighters, T-7 training jet and the Air Force One recapitalization effort. Ortberg, who took over as CEO nearly a year ago, said the company is making a 'turnaround,' after taking major losses in 2024. On the defense side, the firm is making 'renewed efforts around baseline and risk management' on key military programs. The goal is to get to 'high single-digit' profit margins in the near future. One of those efforts is to avoid entering into fixed-price development contracts with DOD, which put the company at risk of accruing major charges from the government for exceeding cost and schedule targets. Boeing's KC-46 work offers a cautionary tale for this approach, after years of quality problems and overages have resulted in more than $7 billion in additional costs for the company. 'We're not making the errors of the past and signing up for fixed-price development, high-risk programs,' Ortberg said, noting that while the company carries several major development programs, it's working closely with the DOD to de-risk that work. 'We're just going to have to keep doing that,' he said. Sign in to access your portfolio
Gulf Today
2 days ago
- Business
- Gulf Today
Boeing's quarterly loss shrinks as jet deliveries rebound, shares drop
Boeing's quarterly loss more than halved and was much smaller than analysts expected as the US planemaker ramped up jet deliveries, recovering from a regulatory crisis and a major strike that halted most production last year. The results highlighted Boeing's efforts to cautiously increase monthly output this year, following years of quality issues and production delays on its flagship 737 MAX. Increased deliveries mark a pivotal step in Boeing's effort to rebound from years of production disruptions and crises that piled on debt, increasing the urgency of accelerating output to restore financial stability. Boeing shares dropped 3.7% in midday trading. The company's financial improvements were tempered by its announcement that certification of the new 777-9 and 737 MAX 7 and 10 models will not happen until 2026, another setback for those programs. The company previously said it expected to finish certification by the end of this year. The company is still developing solutions to address problems with the 737 MAX models' engine de-icing systems that are stalling certification, which is proving a "little more tricky" than anticipated, Boeing CEO Kelly Ortberg told CNBC. During the interview, he praised President Donald Trump's aggressive use of tariffs to hammer out trade deals. "I like the way this tariff situation is playing out," Ortberg told CNBC. "It's good for our business, is good for aerospace," and will create jobs in the United States. The US and EU agreed to exempt aircraft and aviation parts from tariffs. However, raw materials such as steel and aluminium remain subject to steep duties. The planemaker posted an adjusted core loss per share of $1.24 for the quarter through June, compared with a $2.90 loss a year ago. Analysts had expected a loss of $1.48 per share. The planemaker's free cash flow usage, a key metric for Wall Street, was better than expected, signaling an improving cash position. "As we continue to execute our Safety & Quality Plan, there's more stability in our operations," Ortberg said in a letter to Boeing employees. Boeing's commercial plane division will lose money through the year, but free cash flow looks to be positive by year-end, Boeing Chief Financial Officer Brian West said during a call with analysts. In May, the company produced 38 737s and production has been stable since then, according to Boeing. The company expects to shut down its 737 shadow factory in Moses Lake, Washington, which supports its main production lines, by the end of the year, West said. The US Federal Aviation Administration capped the production of Boeing's best-selling 737 MAX jets following a mid-air panel blowout in a nearly new jet in January 2024. "We plan to seek FAA approval to increase to rate 42 when our key performance indicators (KPIs) show that we're ready," Ortberg added. The agency will review Boeing's supply chain before allowing a rate increase, FAA Administrator Bryan Bedford said last week. He called Boeing's efforts to improve production quality "real' but "embryonic.' Boeing delivered 206 737 MAX jets through the first half of the year, compared to 135 a year earlier. Across all commercial jet programs, it delivered 285 airliners through June, compared to 175 during the same period in 2024. Wall Street closely tracks aircraft deliveries because planemakers collect much of their payment when they hand over jets to customers. Boeing also increased 787 production at its plant in Charleston, South Carolina, from five aircraft a month to seven. The company expects to deliver more than a dozen 787s that have been delayed due to supply-chain problems, West said. Through the first half of the year, the planemaker booked 668 orders, or 625 net orders after cancellations and conversions. In May, Boeing's defense, space, and security division resumed deliveries of its KC-46 aerial refueling tanker to the US Air Force, after finding cracks in at least two new aircraft this year. The company started ground testing of the MQ-25, a refueling drone ordered by the US Navy, during the quarter. Members of the machinists union at the defense division overwhelmingly rejected a four-year contract offer on Sunday. The union represents 3,200 Boeing employees, mostly in the St. Louis area. If negotiations stall, union members could approve a strike as soon as Sunday. A strike would be much smaller than the one Boeing endured last fall, when 33,000 machinists at Boeing's commercial plane division walked out for nearly two months. "We'll manage through this," Ortberg said during the call. The division earned an operating profit of $110 million, compared with a loss of $913 million a year ago. It reported free cash flow usage of $200 million for the second quarter, compared with analysts' expectations of $1.72 billion, according to data compiled by LSEG. Boeing burned $2.3 billion in free cash during the previous quarter and $4.33 billion during the second quarter of 2024. Revenue for the quarter rose 35% to $22.75 billion, beating analysts' estimates of $21.84 billion. Agencies
