Boeing (BA, Financial) released its second-quarter earnings on July 24 before the market opened. The company’s earnings were disappointing due to a decline of 104 plane deliveries to its customers compared to the prior period.
Snapshot of the quarter
The aerospace giant recorded adjusted loss per share of $5.82 in the second quarter versus earnings of $3.33 in the year-ago quarter. Revenue during the period amounted to $15.8 million, reflecting a decline of 35% year-on-year.
At quarter-end, the company had cash and cash equivalents of $9.7 billion and long-term debt of $14.86 billion.
Effect of 737 Max on earnings
Boeing had trimmed production of its flagship 737 Max to 42 from 52 a month following two lethal crashes in March. Grounding of the Max 737 adversely impacted the company’s earnings by $8.74 per share this quarter. The company could shut down production of the 737 Max for the short term in case it does not return to service in the fourth quarter.
Segment details
Sales in the Commercial Airplane segment dropped 66% to $4.7 billion due to lower 737 deliveries and a charge associated with the grounding of the 737 Max. The segment’s operating expense was $5 billion, down from operating income of $1.8 billion reported in the second quarter last year. The segment has unfulfilled orders of more than 5,500 planes valued at $390 billion.
Revenue for the Defense, Space and Security division climbed 8% in the second quarter to $6.61 billion due to high volume of sales of derivative aircraft, satellites and weapons. Operating margins grew 850 basis points to 14.7%. The segment’s backlog was valued at $64 billion.
At Boeing Global Services, revenue inched up 11% year-on-year to $4.54 billion. The rise was primarily driven by stronger volume for international government services, which included the acquisition of KLX Aerospace. The operating margin improved 40 basis points to 15.1% in the reported quarter.
Boeing’s Capital Corp. sector’s revenue amounted to $75 million, ahead of $72 million reported in the year-ago quarter. Operating earnings were $37 million.
Backlog
The value of unfulfilled orders at the end of the second quarter was $474 million, down from $487 million at the end of the first quarter.
Disclosure: I do not hold any position in the stock mentioned.
Read more here:Ă‚
Key Takeaways From Ford’s 2nd-Quarter EarningsÂ
Whirlpool’s 2nd-Quarter Earnings Edge Past EstimatesÂ
What Investors Need to Know About Honeywell’s 2nd-Quarter ResultsÂ
Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.
