New York (CNN Business)Boeing returned to profitability in the second quarter, posting net income for the first time since the start of the Covid-19 pandemic last year.
Boeing earned $567 million in the quarter, compared to a $2.4 billion loss a year earlier. Analysts had forecast another loss of $161 million, and had not expected Boeing to return to profitability until later this year.But revenue of $17 billion exceeded estimates by nearly $500 million, helping to lift results. Shares of Boeing (BA) jumped 5% in premarket trading on the news.
Boeing CEO Dave Calhoun cautioned Boeing’s problems are not necessarily behind it.
“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,” he said.Read MoreAir travel has recovered in recent months, particularly in US domestic markets, with a surge of leisure travel this summer, driven by pent-up demand. Business travel is expected to rebound in the fall. Most major US airlines said they expect a return to profitability in the second half of this year. But international travel, a key to the many overseas airlines operations, remains stalled by pandemic-related measures limiting cross-border flights.Still, expectations of a rebound in air travel is good news for Boeing. Last month, United Airlines booked the largest plane order in its history — an order for 270 737 Max jets.
United Airlines orders 270 jets, its biggest aircraft purchase everBoeing’s problems predate the pandemic. Its best-selling plane, the 737 Max, was grounded in March 2019, halting deliveries for 20 months, following two fatal crashes that killed 346 people. Orders for more than 1,000 of the jets were canceled during the grounding, especially when the pandemic hit demand for flying and caused airlines to conserve cash. Boeing is still working to deliver the jets it built during the grounding, sometimes looking for new buyers for some of the completed aircraft.
Although most airline regulators around the world have approved the 737 Max to fly again following the FAA clearance in November, Chinese aviation authorities have not cleared the plane as of yet, blocking deliveries to airlines there. Deliveries are a key for Boeing since it gets most of its revenue at the time of delivery. And Boeing continues to deal with other quality problems. Earlier this month it disclosed a new issue with the 787 Dreamliner widebody jet, which has been dogged with problems since August. The company said some of the planes’ fuselage was not joined together to meet precise standards and there are questions about the verification process to make sure they meet the standards. Those questions will delay the delivery of some of those jets that Boeing has built.
Source: edition.cnn.com