The general spread of COVID-19 vaccines globally is seen as the main driver of the company’s encouraging second-quarter results.
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This story originally appeared on ValueWalk
Boeing reported earnings for the first time in six quarters, thanks to the return of the travel industry and increased deliveries of its best-selling 737 MAX aircraft.
Return of the travel industry
The general spread of COVID-19 vaccines globally is seen as the main driver of the company’s encouraging second-quarter results. As reported by Reuters , “The 737 MAX is an integral part of Boeing’s financial recovery as the US aircraft manufacturer struggles to recoup billions of dollars in lost sales from the pandemic.”
Boeing recovered from a net loss of $ 2.96 billion in the second quarter of last year, to reach a profit of $ 567 million this time. Following Wednesday’s announcement, Boeing shares rose 3.8% in premarket trading.
As reported by CNBC , “Boeing’s revenue increased 44% to nearly $ 17 billion from $ 11.8 billion a year earlier, topping analyst estimates of $ 16.54 billion.”
Chief Executive Officer David Calhoun said the company aims to stabilize its staffing levels at around 140,000 employees, after previous planning for a total of 130,000 by the end of this year.
Calhoun said: “While our commercial market environment is improving, we are closely monitoring COVID-19 case rates, vaccine distribution and global trade as key indicators for the stability of our industry.”
He also stated that, going forward, the company would monitor infection rates, vaccine launch, travel protocols, and global trade as primary indicators of recovery.
737 MAX aircraft orders
The 737 MAX model was the workhorse that pushed Boeing back to its darkest days, as sales and deliveries of the once-defective plane surged in recent months.
In June, United Airlines Holdings announced the largest aircraft order in its history, consisting of 200 units of the 737 MAX and 70 Airbus 321neo. Southwest Airlines ordered 34 the same month.
With this money in the bag, Boeing’s revenue from its commercial aircraft unit “increased nearly 270% from a year earlier to $ 6.02 billion in the second quarter. But the segment still reported negative margins of 7.8 percent. “
Boeing’s financial results are also achieved despite the 777X’s airworthiness issues. In late June, the FAA declared that the aircraft was unfit to fly as it needed to take further certification measures that derailed the plan to launch it until mid-to-late 2023.
Additionally, the 787 Dreamliner delivery forecast has been adjusted as Boeing said it would delay handovers to airlines for the second time in less than six months, after discovering additional manufacturing defects in the planes.