Boeing Co Updates
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Boeing plans to cut 10,000 fewer jobs than forecast during the depths of the coronavirus pandemic as the market recovery accelerates.
The American aircraft manufacturer currently has about 140,000 employees and expects to remain at that level. Boeing said in October last year that it aims to reduce its workforce from 160,000 to 130,000 through layoffs, voluntary departures and attrition as the Covid-19 crisis and travel restrictions devastated airline demand for new jets.
“We are now seeing greater stability in our workforce as the commercial market recovery accelerates, our defense and government services focus on growth opportunities, and we are increasing investment to further strengthen engineering,” CEO David Calhoun said in a memo to employees. .
He added that the pace of the commercial market recovery, as well as trade relations with China and Boeing’s financial performance, would be key factors in determining future employment levels.
That market recovery would likely fluctuate, the company warned, as it depended on how the spread of the contagious Delta strain would affect the number of Covid cases and how quickly people were vaccinated against the virus.
Boeing beat Wall Street’s expectations on earnings per share and sales, posting its first quarterly profit since September 2019. Shares were up 6 percent in pre-market trading.
The company reported net income of $567 million in the second quarter and 40 cents of core earnings per share. A year ago it lost $4.79 a share, and Wall Street analysts had forecast a loss per share of 83 cents this quarter.
The manufacturer had sales of $17 billion, compared to $16.6 billion that analysts had forecast, up 44 percent from the same period last year.
Sales were driven by improved commercial deliveries and demand for services. Boeing delivered 79 commercial aircraft during the quarter, the majority of which were 737 Maxes, as manufacturing defects forced the company to stop shipping the widebody 787 Dreamliner in May.
Boeing’s services business also added $4.1 billion to the company’s revenue, up 17 percent from the second quarter of 2020 as airlines resume maintenance they didn’t need as they cut schedules due to the recession. pandemic.
The company also reduced free cash outflows, which is cash from operations less capital expenditures and is an important metric for investors. It reported an outflow of $705 million, down from $5.6 billion a year ago. The consensus estimate was $3.7 billion.
“From the stock perspective, a shocking beat can only benefit you,” Baird analyst Peter Arment said in a note.