Boeing reports surprise profit and says it will cut fewer jobs

Plane taxis past the Final Assembly Building at Boeing South Carolina in North Charleston, South Carolina, United States, March 31, 2017. REUTERS/Randall Hill
Boeing landed its first quarterly profit since 2019 due to a recovering commercial aviation market that will enable the company to cut fewer jobs than initially planned, according to results released Wednesday.

The aviation giant reported a second-quarter profit of $587 million, compared with a loss of $2.4 billion in the same three months of 2020 at the height of the pandemic, sending Boeing’s shares surging.

The results, which surprised analysts who had projected another loss, marked the company’s first positive earnings since the third quarter of 2019 before coronavirus shuttered the economy.

It comes as commercial airlines are pivoting to meet surging travel demand as Covid-19 vaccines have become available.

Boeing Chief Executive Dave Calhoun said the company will keep its workforce at the current 140,000, rather than cutting to 130,000 as announced earlier in the pandemic.

He cited “encouraging” industry recovery trends in a letter to employees.

“We’re now seeing more stability in our staffing levels, as the commercial market recovery accelerates, our defense and government services business targets growth opportunities and we increase investments to further strengthen engineering, and drive quality and stability in our production system,” Calhoun said.

Boeing’s revenues rose to $17 billion, up 44 percent from a year earlier, and the company saw higher operating earnings in defense, space and security.

It also saw a much smaller quarterly loss in its commercial plane division, thanks largely to the resumption of deliveries of the 737 MAX that were suspended after the 20-month grounding following two fatal crashes.

Boeing also swung to a profit in its global services business after the division had a loss last year as a result of Covid-19 costs.

Despite the strong results, Boeing still faces questions over its operations, most recently with the 787 Dreamliner plane. Boeing has halted deliveries of the jets and lowered production levels while it does additional reworking on the plane.

Shares jumped 5.4 percent to $234.30 in pre-market trading.