Boeing has posted a surprise profit for the second quarter of 2021, with a core operating profit of $755 million compared with a loss of $3.32bn in the prior year period. Revenues were up to $17.0bn, driven by higher commercial airplanes and services volume. Operating cash flow improved to a loss of $500 million in the quarter, driven by higher commercial deliveries, higher order receipts, and lower expenditures.
"We continued to make important progress in the second quarter as we focus on driving stability across our operations and transforming our business for the future,” said Boeing President and Chief Executive Officer David Calhoun. “While our commercial market environment is improving, we're closely monitoring COVID-19 case rates, vaccine distribution and global trade as key indicators for our industry's stability. As we continue to position for a robust recovery, we remain committed to safety and quality, while investing in our people, products and technology.”
Boeing has succeeded in reducing its cash and investments in marketable securities to $21.3 billion, compared to $21.9 billion at the beginning of the quarter, primarily driven by operating cash outflows. The company has access to credit facilities of $14.8 billion, which remain undrawn.
Boeing delivered 79 aircraft in the second quarter – up from 20 a year ago – and booked revenue for commercial airplanes of $6.015bn compared to $1.636bn in Q2 2020. Current backlog includes over 4,100 airplanes valued at $285 billion
Commercial airplanes operating margin improved to a decline of just 7.8% (from 169.1% decline a year ago), primarily due to lower period costs as well as higher delivery volume. Global Services second-quarter revenue increased to $4.1 billion and second-quarter operating margin increased to 13.1% primarily driven by higher commercial services volume. Operating margin was also favourably impacted by lower asset impairments, lower severance costs, and mix of products and services.
Boeing confirmed that it was continuing to make progress on the global safe return to service of the 737 MAX, with 30 airlines now operating the aircraft, safely flying nearly 95,000 revenue flights totalling more than 218,000 flight hours.
Boeing expects to increase the 737 program production rate to 31 per month in early 2022 from the current rate of 16.
The manufacturer is grappling with the required inspections and rework for undelivered 787 aircraft and says that it is reprioritizing production resources “for a few weeks” to support this process, which means the 787 production rate will temporarily decline to less than five per month. Boeing expects to deliver fewer than half of the 787s currently in inventory this year.