A Boeing 737 MAX jet.
Jason Redmond/AFP via Getty ImagesBoeing delivered 20 planes in the second quarter. While it isn’t unexpected, it isn’t good. The 737 MAX saga and global coronavirus pandemic continue to hammer the commercial aerospace giant.
Boeing (ticker: BA) updates delivery figures monthly, so there is little drama in quarterly releases. Still, 20 is the lowest quarterly number since 1963. Boeing delivered 149 planes in the second quarter of 2019 and 184 planes in the second quarter of 2018.
Investors have shrugged off the news. Boeing stock rose 1% in Tuesday trading. The Dow Jones Industrial Average is up 1.1%, while the S&P 500 has gained 0.5%. Delivery aren’t hitting the stock because they represent a tiny part of much bigger problems.
“Our commercial airplane deliveries in the second quarter reflect the significant impacts of the Covid-19 pandemic on our customers and our operations,” said Greg Smith, Boeing executive vice president of Enterprise Operations, chief financial officer and interim leader of communications, in a company news release. “We continue to closely monitor the commercial marketplace by staying very engaged with our customers around the globe to fully understand short term and long term requirements.”
The pandemic is one problem. The 737 MAX is the other. Boeing’s troubled 737 MAX jet remains grounded world-wide after two deadly crashes within a five-month span. Boeing stock fell roughly 20% in the aftermath of the second crash in March 2019 through the end of the year.
The viral pandemic has knocked Boeing shares down about 46% so far in 2020. Fewer people are getting on planes, which means reduced demand for Boeing products in the future.
The entire aerospace value chain, from suppliers to airlines, faces a similar Covid-19 problem. Shares of those companies are down similar amounts to Boeing this year.
Boeing is a large defense contractor as well and delivered several Apache and Chinook helicopters as well as F-15 jets.
Boeing will report full second-quarter results on July 29. Analysts expect a loss of about $2.12 a share from $14 billion in sales. Sales are expected to drop almost 10% year over year. The second quarter of 2019 was impacted significantly by MAX problems. Boeing generated more than $24 billion in sales during the second quarter of 2018.
Write to Al Root at allen.root@dowjones.com
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July 15, 2020 at 02:03AM
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Boeing Delivered 20 Planes in the Second Quarter. Here’s How Bad It Is. - Barron's
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