Boeing Set to Increase Production as Earnings Exceed Expectations

Boeing’s second-quarter earnings were good. What’s more, production is increasing. It’s a relief for investors. Shares were up in early trading.

Boeing on Wednesday reported a per-share loss of 82 cents from sales of $19.8 billion. Wall Street was looking for a loss of 88 cents a share from sales of $18.5 billion. It’s a loss, but beating estimates is good news. Coming into the earnings report, Boeing had missed Wall Street’s quarterly earnings estimates in 14 of the past 17.

The company also raised its full-year profit outlook to $2.10 to $2.30 a share, up from its previous range of no more than $2.00 and above the $2.05 average of analyst estimates compiled by Bloomberg. Boeing also increased its free cash flow guidance to as much as $4.6 billion, compared to no more than $4.2 billion under its prior outlook.

The improved outlook reflects Boeing’s strong performance in the second quarter, when it reported a 59% increase in total orders and an 18% increase in total revenues year-over-year. The company’s profit margin also expanded by 1,510 basis points to 8.3%, while its free cash flow improved by $0.2 billion to $0.4 billion.

The main driver of Boeing’s growth was its aviation unit, which delivered double-digit growth in orders, revenue, and operating profit year-over-year driven by commercial momentum and strength in services. The unit’s profit margin increased by 160 basis points organically to 8.8%, as the company ramped up production of its LEAP engines and benefited from the recovery of air travel demand amid the easing of pandemic restrictions.

Boeing CEO Dave Calhoun said the company’s second-quarter performance was “strong”, building on its first-quarter momentum and marking “a solid first half of the year”. He said the company raised its full-year guidance “as market strength and the lean transformation within our more focused businesses drive significant profit and cash improvement across Boeing”.

Sources: AirGuide Business airguide.info, msn.com, cnbc.com, investors.boeing.com, investors.com