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A Boeing 737 MAX airplane.
Jason Redmond / AFP via Getty Images
Boeing delivered 20 aircraft in the second quarter. While it is not unexpected, it is not good. The 737 MAX saga and the global coronavirus pandemic continue to plague 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 aircraft in the second quarter of 2019 and 184 aircraft in the second quarter of 2018.
Investors have ignored the news. Boeing shares rose 1% in trading on Tuesday. The Dow Jones Industrial Average rose 1.1%, while the S&P 500 gained 0.5%. Delivery does not affect stock because they represent a small part of much bigger problems.
“Our commercial aircraft 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 business operations, chief financial officer and interim communications leader, at a company press release. “We continue to closely monitor the commercial market while remaining very committed to our customers around the world to fully understand the short and long term requirements.”
The pandemic is a problem. The 737 MAX is the other. Boeing’s troubled 737 MAX aircraft remains on the ground worldwide after two fatal accidents in a span of five months. Boeing shares fell approximately 20% after the second collapse in March 2019 until the end of the year.
The viral pandemic has reduced Boeing’s shares by approximately 46% so far in 2020. Fewer people are getting on the planes, which means less 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 have dropped similar amounts to Boeing this year.
Boeing is also a large defense contractor and delivered several Apache and Chinook helicopters, as well as F-15s.
Boeing will report full second quarter results on July 29. Analysts expect a loss of approximately $ 2.12 per share of $ 14 billion in sales. Sales are expected to drop nearly 10% year-over-year. The second quarter of 2019 was significantly affected by MAX’s problems. Boeing generated more than $ 24 billion in sales during the second quarter of 2018.
Write to Al Root at [email protected]
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