The new CEO of Boeing, Kelly Ortberg, believes there is still “much work to be done.”
Latest News from Boeing’s New CEO: Ortberg’s next several months will be very difficult, as he must work to restore Boeing’s aircraft production and significantly reduce the regulators’ mistrust.
Kelly Ortberg was named CEO of Boeing, a major aircraft manufacturer, on July 31st. After the announcement, Ortberg made his initial remarks, stating that “there is much work to be done.” The veteran of the aerospace sector will face a challenging assignment. Ortberg’s next few months will be quite difficult, ranging from revitalizing Boeing’s aircraft production to making a strong effort in reducing the regulators’ lack of faith.
Boeing reports lower sales and a larger loss than anticipated.
Boeing’s commercial aircraft and defense programs continued to suffer, as the company on Wednesday reported a larger quarterly loss and lower revenue than experts had predicted. In an effort to restore its footing, Boeing also announced that it has appointed Robert “Kelly” Ortberg, a more than three-decade veteran of the aerospace business, as its next CEO.
Here is a comparison between Boeing’s second-quarter results and the LSEG-compiled estimates:
- Loss per share: $2.90 adjusted per share as opposed to $1.97 adjusted per share
- Revenue: decreased to $17.23 billion from $16.87 billion.
In comparison to the same period last year, when it lost $149 million, or 25 cents per share, Boeing recorded a net loss of $1.44 billion, or $2.33 per share, for the second quarter. According to LSEG, the business posted a loss of $2.90 per share on an adjusted basis, coming in about $1 per share beneath analyst estimates.
At $16.87 billion, revenue for the three months that concluded on June 30 decreased by 15%.
After a door plug explosion from a nearly new 737 Max at the beginning of the year prompted extra regulatory investigation and further delayed the delivery of new, more fuel-efficient aircraft to airlines, Boeing is working to stabilize its operations.
Boeing stated on Wednesday that it still intends to boost Max production to 38 aircraft per month. According to analysts, the previous quarter’s production was in the mid-20s each month.
The crucial commercial aircraft division of the business saw a 32% decrease in sales to $6 billion on an annual basis.
A few of Boeing’s financial goals have been delayed due to low production and deliveries.
In May, CFO Brian West issued a warning, stating that lower-than-expected production and delivery rates would be the main causes of the company’s cash burn in the second quarter, which would be comparable to the first.
The manufacturer revealed its $4.3 billion negative free cash flow for the second quarter on Wednesday.
Other Boeing business divisions have also experienced delays and cost overruns. For example, the defense unit is running behind schedule to complete the two Boeing 747s that will be Air Force One.
The business’s defense division recorded a 2% drop in sales to $6.02 billion during the second quarter. During the quarter, the segment lost $913 million, which is about twice as much as it lost in 2023 ($527 million). In addition to technical difficulties, some of the losses “reflect higher estimated engineering and manufacturing costs,” according to Boeing.
Significant issues to be resolved
Ortberg will be occupied with resolving the issues at Boeing, which hasn’t turned a profit since 2019. Its losses from core operations, including the one disclosed on Wednesday, have amounted to $33.3 billion since then. Boeing won’t be able to generate a profit again unless it can persuade authorities that the issues with the aircraft’s safety and quality have been resolved.
The manufacturer has acknowledged that a design defect caused two 737 Max disasters in October 2018 and March 2019 that claimed the lives of 346 people in all. The plane was grounded for 20 months, costing the firm almost $20 billion, as a result of the crashes and the time it took to correct the design issue.
It recently consented to enter a guilty plea to allegations that its staff members deceived the Federal Aviation Administration during the 737 Max’s initial certification procedure. Boeing entered into a guilty plea and consented to operate under the watchful eye of a monitor designated by the court.
Following the January 737 Max plane’s door plug blowing out shortly after takeoff, the business has been the subject of increased scrutiny. Over a dozen informants have provided Congressional investigators with information regarding unethical behavior at Boeing, such as the utilization of non-standard parts. Many said that when workers voiced concerns about safety procedures, Boeing responded.
