Loss was wider, revenue was lower than Wall Street expected
By David Koenig
AP Airlines Writer
Boeing named a longtime aerospace industry veteran as its next chief executive, who will take over a company that has been rocked by legal, regulatory and production problems.
Robert “Kelly” Ortberg, 64, a former CEO at aerospace supplier Rockwell Collins, will succeed David Calhoun, 67, as CEO effective Aug. 8, the company said on Wednesday.
Boeing announced its new CEO as it reported a loss of more than $1.4 billion on falling revenue during the second quarter. The loss was wider and revenue lower than Wall Street expected, as both Boeing’s commercial-airplanes business and defense unit lost money.
The disappointing results come at a tumultuous time for Boeing. The company agreed to plead guilty to fraud in connection with the Max, two of which crashed, killing 346 people. The Federal Aviation Administration has increased its oversight of the company following mistakes including the blowout of a panel on an Alaska Airlines jet. It is pushing back against whistleblower allegations of manufacturing shortcuts that crimp on safety.
The company is dealing with supply-chain problems that are hindering production, which it hopes to fix in part by re-acquiring Spirit AeroSystems, a key contractor. It is still trying to persuade regulators to approve two new models of the Max and a bigger version of its two-aisle 777 jetliner. And it faces a multi-billion-dollar decision on when to design a new single-aisle plane to replace the Max.
Ortberg will become CEO and president on Aug. 8, Boeing said. He emerged as a leading candidate only recently. Others who were reportedly considered for the job included Patrick Shanahan, a former Boeing executive and now CEO of its most important supplier, Spirit AeroSystems, and another longtime Boeing executive, Stephanie Pope, who recently took over the commercial-airplanes division.
Chairman Steven Mollenkopf said Ortberg was chosen after a “thorough and extensive search process” and “has the right skills and experience to lead Boeing in its next chapter.”
Mollenkopf said Ortberg has earned a reputation for running complex engineering and manufacturing companies.
A Boeing spokesperson said the company had waived the mandatory retirement age of 65 for Ortberg. Boeing did the same for Calhoun days after he turned 64 in 2021.
Boeing, based in Arlington, Virginia, reported a loss of $1.44 billion for the second quarter, compared with a loss of $149 million a year earlier.
Excluding special items, the loss worked out to $2.90 per share. Analysts expected a loss of $1.90 per share, according to a FactSet survey.
Revenue dropped 15%, to $16.87 billion, falling short of Wall Street’s average forecast of $17.35 billion.
The commercial-airplanes division had an operating loss of $715 million and revenue plunged 32% as Boeing delivered fewer passenger jets to airlines — 92 planes, compared with 136 a year earlier.
The FAA has limited Boeing’s production of Max jetliners since shortly after the Alaska Airlines incident, but Boeing hasn’t even hit the FAA limits as it seeks to fix its manufacturing process. The company said Wednesday that it is sticking with its plans to boost production of the Max to 38 per month by year end.
Boeing took a charge of $244 million to cover a fine that it would pay as part of an agreement with the Justice Department to plead guilty to fraud in connection with development of the Max. A federal judge in Texas will soon consider whether to approve the deal, which is opposed by many families of those who died in the two Max crashes.
Boeing’s defense and space unit lost $913 million because of $1 billion in setbacks to four fixed-price government contracts, including a deal to build two new Air Force One presidential jets. The smaller services business earned $870 million.
Boeing shares added 2% in premarket trading.
AP Airlines Writer
Boeing named a longtime aerospace industry veteran as its next chief executive, who will take over a company that has been rocked by legal, regulatory and production problems.
Robert “Kelly” Ortberg, 64, a former CEO at aerospace supplier Rockwell Collins, will succeed David Calhoun, 67, as CEO effective Aug. 8, the company said on Wednesday.
Boeing announced its new CEO as it reported a loss of more than $1.4 billion on falling revenue during the second quarter. The loss was wider and revenue lower than Wall Street expected, as both Boeing’s commercial-airplanes business and defense unit lost money.
The disappointing results come at a tumultuous time for Boeing. The company agreed to plead guilty to fraud in connection with the Max, two of which crashed, killing 346 people. The Federal Aviation Administration has increased its oversight of the company following mistakes including the blowout of a panel on an Alaska Airlines jet. It is pushing back against whistleblower allegations of manufacturing shortcuts that crimp on safety.
The company is dealing with supply-chain problems that are hindering production, which it hopes to fix in part by re-acquiring Spirit AeroSystems, a key contractor. It is still trying to persuade regulators to approve two new models of the Max and a bigger version of its two-aisle 777 jetliner. And it faces a multi-billion-dollar decision on when to design a new single-aisle plane to replace the Max.
Ortberg will become CEO and president on Aug. 8, Boeing said. He emerged as a leading candidate only recently. Others who were reportedly considered for the job included Patrick Shanahan, a former Boeing executive and now CEO of its most important supplier, Spirit AeroSystems, and another longtime Boeing executive, Stephanie Pope, who recently took over the commercial-airplanes division.
Chairman Steven Mollenkopf said Ortberg was chosen after a “thorough and extensive search process” and “has the right skills and experience to lead Boeing in its next chapter.”
Mollenkopf said Ortberg has earned a reputation for running complex engineering and manufacturing companies.
A Boeing spokesperson said the company had waived the mandatory retirement age of 65 for Ortberg. Boeing did the same for Calhoun days after he turned 64 in 2021.
Boeing, based in Arlington, Virginia, reported a loss of $1.44 billion for the second quarter, compared with a loss of $149 million a year earlier.
Excluding special items, the loss worked out to $2.90 per share. Analysts expected a loss of $1.90 per share, according to a FactSet survey.
Revenue dropped 15%, to $16.87 billion, falling short of Wall Street’s average forecast of $17.35 billion.
The commercial-airplanes division had an operating loss of $715 million and revenue plunged 32% as Boeing delivered fewer passenger jets to airlines — 92 planes, compared with 136 a year earlier.
The FAA has limited Boeing’s production of Max jetliners since shortly after the Alaska Airlines incident, but Boeing hasn’t even hit the FAA limits as it seeks to fix its manufacturing process. The company said Wednesday that it is sticking with its plans to boost production of the Max to 38 per month by year end.
Boeing took a charge of $244 million to cover a fine that it would pay as part of an agreement with the Justice Department to plead guilty to fraud in connection with development of the Max. A federal judge in Texas will soon consider whether to approve the deal, which is opposed by many families of those who died in the two Max crashes.
Boeing’s defense and space unit lost $913 million because of $1 billion in setbacks to four fixed-price government contracts, including a deal to build two new Air Force One presidential jets. The smaller services business earned $870 million.
Boeing shares added 2% in premarket trading.
