The Boeing Company reported second-quarter revenue of $17.0 billion and profit of $567 million , driven by higher commercial airplanes and services volume. The surprise results mean the end of 6 consecutive quarters of lossmaking for Boeing
“We continued to make important progress in the second quarter as we focus on driving stability across our operations and transforming our business for the future,” said Boeing President and Chief Executive Officer David Calhoun.
“While our commercial market environment is improving, we’re closely monitoring COVID-19 case rates, vaccine distribution and global trade as key indicators for our industry’s stability. As we continue to position for a robust recovery, we remain committed to safety and quality, while investing in our people, products and technology. I am proud of our team’s resilience and commitment as we work to rebuild trust, improve our performance and deliver for our commercial, defense, space and services customers.”
Boeing is continuing to make progress on the global safe return to service of the 737 MAX. Since the FAA’s approval to return the 737 MAX to operations in November 2020, Boeing has delivered more than 130 737 MAX aircraft and airlines have returned more than 190 previously grounded airplanes to service. 30 airlines are now operating the 737 MAX, safely flying nearly 95,000 revenue flights totaling more than 218,000 flight hours (as of July 25, 2021). The 737 program is currently producing at a rate of approximately 16 per month and continues to expect to gradually increase production to 31 per month in early 2022 with further gradual increases to correspond with market demand. The company will continue to assess the production rate plan as it monitors the market environment and engages in customer discussions.
As Boeing has previously shared, the company is conducting inspections and rework and continues to engage in detailed discussions with the FAA on verification methodology for 787. In connection with these efforts, the company announced earlier this month that it has identified additional rework that will be required on undelivered 787s. Based on our assessment of the time required to complete this work, Boeing is reprioritizing production resources for a few weeks to support the inspection and rework. As that work is performed, the 787 production rate will temporarily be lower than five per month and will gradually return to that rate. Boeing expects to deliver fewer than half of the 787s currently in inventory this year.
Commercial Airplanes secured orders for 200 737 aircraft for United Airlines, 34 737 aircraft for Southwest Airlines, and a total of 31 freighter aircraft. Commercial Airplanes delivered 79 airplanes during the quarter and backlog included over 4,100 airplanes valued at $285 billion.
Global Services second-quarter revenue increased to $4.1 billion and second-quarter operating margin increased to 13.1 percent primarily driven by higher commercial services volume. Operating margin was also favorably impacted by lower asset impairments, lower severance costs, and mix of products and services.
During the quarter, Global Services signed an expanded parts agreement with Turkish Technic and announced a partnership to expand capacity for 737-800 Boeing Converted Freighters. Global Services was also selected to provide P-8A training and sustainment as well as C-17 training to the U.K. Royal Air Force, and was awarded a modification for KC-46A interim contract support for the U.S. Air Force.
In his message to employees addressing the company’s second-quarter results, Dave Calhoun happily reported that the company would see more stability around its workforce.
“We’re now seeing more stability in our staffing levels, as the commercial market recovery accelerates, our defense and government services business targets growth opportunities and we increase investments to further strengthen engineering, and drive quality and stability in our production system.
Last fall, we planned to reduce the size of our workforce to about 130,000 employees by the end of this year. However, with encouraging recovery trends and our investments in our people, we’re now planning to keep our overall workforce size roughly consistent with where we are today, at about 140,000 employees. As we have done throughout the pandemic, we will also continue hiring in some parts of our business to fill critical skill positions and meet customer commitments. Going forward, the pace of the commercial market recovery, trade relations with China and our own performance will be key enablers to overall employment levels.
As many of our teammates who have been telecommuting through the pandemic return to Boeing facilities or begin hybrid work arrangements – we are focusing on strengthening our culture. We’re maintaining flexibility, prioritizing health and safety, and providing well-being resources to help our employees and communities navigate the post-pandemic recovery and related uncertainties that are developing in pockets around the world. We’re also continuing to incorporate our Seek, Speak & Listen (SS&L) habits, helping to empower our teams to connect across perspectives, learn from one another, share ideas, speak up and strengthen our culture of inclusion and integrity. And as a leadership team, we’re increasing travel to meet with our customers, suppliers and teams, to get as close as possible to our manufacturing and engineering work, while supporting all of you who are delivering for our customers.
Thank you for all you do. Boeing is 105 years strong, and every day we’re building a better Boeing not only through the products and services we deliver but also in how we operate, innovate and support each other. While risks and challenges remain, and we have more work to do, I am confident in our future and proud to be on your team.” he wrote