Boeing stock is trading higher in early US price action today on reports that the company has averted a labor strike and the deliveries of its 787 Dreamliner could resume as soon as this week.
With a YTD fall of almost 21%, Boeing stock is underperforming the markets. It has nonetheless bounced back from its 2022 lows amid the recovery in broader markets.
Boeing has managed to avert a strike of its defense workers who would instead vote on a new proposal on Wednesday. The new proposal was made by Boeing to workers at three factories. The Federal Aviation Administration has approved inspection protocol revisions of the company’s 787 Dreamliner and deliveries are expected to soon resume.
Separately, Boeing announced that it has delivered a 737-8 airplane to Bonza, a new Australian carrier. The 737 series has had a turbulent past after two fatal crashes, post which the fleet was grounded globally. The FAA later cleared the series for flying.
Commenting on the Bonza delivery, Christy Reese, vice president of Commercial Sales and Marketing Asia Pacific, Boeing Commercial Airplanes said, “This is a tremendous milestone for Bonza and Boeing as the airline joins many operators around the world who have launched service with the 737 MAX.”
He added, “Bonza has created a new business model to create new markets in Australia’s dynamic commercial aviation market. We are confident that the fuel-efficient 737-8 airplanes will enable the airline to provide their passengers with a comfortable flying experience and a more sustainable option to travel throughout the country.”
Last month, Virgin Galactic announced a deal with Aurora Flight Sciences, a subsidiary of Boeing. The two companies would partner to design and manufacture Virgin’s next-generation mothership.
Boeing Missed Earnings Estimates in Q2 2022
We’re in the second quarter earnings season. Markets have tepid expectations from companies and have rewarded companies posting better than expected earnings with strong upwards price action. Even when the earnings have been slightly below expectations, as was the case with Microsoft and Alphabet, markets have sent the shares higher.
Amazon meanwhile posted a stellar set of numbers in the second quarter and rose by more than 10% following its earnings release. Many Wall Street analysts raised the stock’s target price and reiterated Amazon stock as a buy following the Q2 earnings release.
Talking of Boeing, the company delivered 121 aircraft in the second quarter as compared to 79 deliveries in the second quarter of 2021. It reported revenues of $16.68 billion in the quarter which fell short of the $17.57 billion that analysts were expecting. Its adjusted per-share loss of 37 was also higher than the 14 cents that analysts were expecting.
The earnings of industrial companies have also been quite mixed. While General Motors posted mixed earnings, Ford delivered a massive earnings beat and also increased its dividend. While both the automakers had suspended their dividends in 2020, Ford restored it back last year. General Motors is yet to resume the dividend.
Boeing has also its dividend suspended. The company had to take a lot of debt in 2020 to survive the COVID-19 pandemic.
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