Boeing Stock Rises as Airplane Deliveries Surge, Narrowing Quarterly Losses

Boeing's fiscal health shows signs of recovery with a significant narrowing of losses in its recent quarterly earnings report, bolstered by a pronounced surge in airplane deliveries. The aerospace giant reported a reduced net loss of $611 million, or 92 cents per share, for the quarter ending June 30, a marked improvement from a $1.44 billion loss, or $2.33 per share, in the same period last year. Excluding extraordinary charges, the company reported a core loss of $1.24 per share, surpassing analyst predictions of a $1.54 loss.

Revenue for Boeing increased substantially to $22.75 billion from $16.87 billion in the second quarter of the previous year. This revenue growth was primarily driven by the delivery of 150 commercial aircraft, a significant increase from 92 deliveries in the previous year. Boeing's Commercial Airplanes division generated $10.9 billion in revenue, maintaining momentum despite a negative margin of 5.1%. The company received 455 net new orders during the quarter, including sizeable contracts with Qatar Airways and British Airways for 787 and 777-9 aircraft, further cementing its foothold in the commercial aviation market.

Looking forward, Boeing plans to increase the production rate of the 737, currently at 38 jets per month, to 42 per month later in 2025. This strategic expansion is poised to bolster Boeing's backlog which now totals $619 billion, encompassing over 5,900 commercial aircraft orders valued at $522 billion. Meanwhile, Boeing's Defense, Space & Security division contributed $6.6 billion in revenue, with an operating margin of 1.7%.

However, the positive financial trajectory is shrouded by ongoing challenges. The company is under pressure from labor unrest, with over 3,200 union workers at its defense plants in the St. Louis area poised to strike on August 4 following a rejected contract proposal. This proposal included a 20% wage increase over four years. This follows the resolution of a significant 53-day strike last fall, which involved 33,000 commercial aircraft workers and concluded with a 38% wage increase over four years. A "cooling-off" period has been implemented in anticipation of the strike.

Adding to these challenges, Boeing continues to grapple with safety and legal hurdles. A recent tragic incident involving an Air India 787 Dreamliner crash resulted in at least 270 fatalities. While the investigation is ongoing and no mechanical flaws have been attributed to the aircraft model yet, Boeing has pledged to support the technical inquiry led by India's Aircraft Accident Investigation Bureau. Furthermore, a report from the National Transportation Safety Board (NTSB) into an incident involving Alaska Airlines Flight 1282 pointed to lapses in Boeing's manufacturing quality control and possible FAA oversight gaps. In response, Boeing has committed to reviewing these findings and enhancing safety across its operations.

President Kelly Ortberg expressed confidence in the company's path to recovery, emphasizing that internal changes to bolster safety and quality are yielding better outcomes as operations stabilize and superior products and services are delivered to customers. Ortberg reiterated Boeing's dedication to regaining trust and advancing recovery amid these challenges while navigating a rapidly evolving global landscape.