Boeing names new CEO after burning $1.4 billion in the quarter

Boeing reported a loss in excess of $1.4 billion for the second quarter of 2024. In addition, the company announced that starting next week, Robert "Kelly" Ortberg, a longtime veteran of the aerospace industry, will take over as CEO, replacing outgoing CEO David Calhoun.

Ortberg, who was previously CEO at contractor Rockwell Collins, will start in his new role on Aug. 8. His appointment follows an extensive search for a suitable candidate. Ortberg was chosen because of his experience managing complex engineering and manufacturing projects, which company chairman Steven Mollenkopf sees as key to Boeing's new direction.

Boeing is facing a challenging time. Financial results for the second quarter show a significant decline in revenue and losses in both its core businesses - commercial aircraft and defence. Revenues were down 15% year-over-year and operating cash flow was minus $3.9 billion. Both commercial aircraft and defence systems segments posted losses, reflecting ongoing supply chain issues and cost increases.

The company is also facing other challenges, including an investigation by the Federal Aviation Administration (FAA) and allegations of manufacturing shortcuts that may compromise safety. Boeing $BA is also working to address supply chain issues and is preparing the acquisition of Spirit AeroSystems, which is expected to be completed in mid-2025.

In commercial aircraft, the company posted $6 billion in revenue, but operating margins were negative due to lower deliveries and higher costs. The 737 program is looking to increase production to 38 aircraft per month by the end of the year, and the 787 program plans to return to 5 aircraft per month. Also, FAA certification testing continues for the 777X program.

The Defense, Space and Security segment achieved revenues of $6 billion with negative margins due to losses on some development programs. The company won new orders including seven MH-139A helicopters from the U.S. Air Force.

Global Services generated revenues of $4.9 billion and a positive margin of 17.8%, due to increased order volume. The end of the quarter saw cash reserves increase to $12.6 billion, partly due to new debt of $10 billion. The company's total debt thus rose to $57.9 billion

Source: Yahoo Finance, CNN.

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