Boeing's Q2 beat signals turnaround is 'continuing to progress'
Yahoo Finance Senior Reporter Pras Subramanian and Bloomberg Intelligence senior aerospace defense and airlines industry analyst George Ferguson take a closer look at the earnings print and what it signals about Boeing's turnaround efforts.
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Boeing beating second quarter expectations as the company slashed costs and aircraft deliveries picked up. This is CEO Kelly Ortberg continues his turnaround playing plan saying the jet maker can quote make 2025 our turnaround year. Joining me now Yahoo Finances Pras Subramanian and George Ferguson Bloomberg Intelligence, Senior Aerospace Defense and Airlines industry analyst. Guys, thanks for being here. Pras, I want to start with you. Sort of give us the the bullet point takeaways on these results and what we need to know.
Yeah, I mean, I think the turnaround plan like that that Ortberg has mentioned is it is working. I mean, revenue up 35% compared to a year ago. Uh narrower core loss per share than expected, but big is that I think the big point is a cash burn cut to 200 million in Q2. A massive improvement compared to the 2.3 billion burned last quarter and 4.3 billion burned a year ago in the same quarter. So that's really changing the dynamics there. What's helping there is they're delivering more planes. Finally, 150, 150 deliveries in Q2. They hit 38 737 Max planes per month in Q2. So, you know, Ortberg optimistic here saying that the start of the second half of the year, we're moving in the right direction ahead of where I thought we'd be in a recovery. If we continue to tackle the important work ahead of us and focus on safety, quality and stability, we can navigate the dynamic global environment, make 2025 our turnaround year. So strong statements here for a company that a year ago was was struggling pretty much.
And and it's also kind of remarkable, George, that the cash burn that has turned around now and was positive on an operating business in the core, on an operating basis in the quarter. How did they achieve that and can they sustain that?
Yes, so I agreed. I think that, you know, that cash generation number is I think is one of the most key metrics to watch for Boeing. Uh it was all about deliveries, right? Deliveries are rising. Uh most importantly the 737 Max, that's their money maker. Uh they had what a bit over 100 deliveries this quarter. We think they could have 135 or so of those deliveries next quarter. We're looking for them to double those deliveries this year. Um that's going to help them continue to generate cash. They've got a lot of inventory in the balance sheet, $89 billion, tens of billions of dollars above where it should be. And as they deliver these airplanes, we think that they won't bring the suppliers up as quickly as they start to deliver airplanes and bring down that inventory and continue to unlock cash. And that cash is, you know, is going going to help them improve the balance sheet. So everything I saw in the quarter looked like uh the turnaround is uh is continuing to progress.
George, I'm curious how much of that deliveries boost was a result of some of the strong arming on the part of the US administration trying to increase deliveries from from other countries. And if so, you know, how sustainable is that?
Yeah, I mean, I think they they dial in these deliveries, you know, um I think they actually start cutting sort of airplanes and building components a couple years out, some of the long lead time items. So I think it'd be hard for the the Trump administration to sort of strong arm and get and get these deliveries sort of pushed up in in short order. I mean, one of the concerns though around deliveries would be the tariff situation. Boeing has a really important customer in uh Europe, Ryanair. We didn't see any deliveries in in the last month. Um and you know, it seems like the tariff situation is sorting itself out. And I think as long as that tariff situation continues to sort itself out, you won't see Boeing building airplanes and parking them on the tarmac, right? They need to get them delivered to the customer to get the cash. That's the one thing I think, you know, we're a little bit concerned about, but so far it seems to be working fine. So I mean, I'm uh I I think they're I think they're going to do all right getting deliveries out the door this year.
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