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Boeing Posts Profit in Second Quarter as Defense and Services Outperform; FVE $260

Burkett Huey, CFA Equity Analyst

Analyst Note

| Burkett Huey, CFA |

Wide-moat-rated Boeing posted a surprise quarterly profit of $0.09 per share (its first quarterly profit since the third quarter of 2019) on July 28 as the firm narrowed operating losses in commercial airplanes, met its operational targets in defense, and benefitted from greater flight activity in services. We maintain our long-term thesis on the company. We think the most pertinent issue for investors is by far the 737 MAX recertification in China, but we are also concerned about the pause in 787 deliveries and are cautiously optimistic about the firm’s defense portfolio going forward.

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Company Profile

Business Description

Boeing is a major aerospace and defense firm. With headquarters in Chicago, the firm operates in four segments, commercial airplanes, defense, space & security, global services, and Boeing capital. Boeing’s commercial airplanes segment generally produces about 60% of sales and two-thirds of operating profit, and it competes with Airbus in the production of aircraft ranging from 130 seats upwards. Boeing’s defense, space & security segment competes with Lockheed, Northrop, and several other firms to create military aircraft and weaponry. The defense segment produces about 25% of sales and 13% of operating profit, respectively. Boeing’s global services segment provides aftermarket servicing to commercial and military aircraft and produces about 15% of sales and 21% of operating profit.

Contact
100 North Riverside Plaza
Chicago, IL, 60606-1596
T +1 312 544-2000
Sector Industrials
Industry Aerospace & Defense
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Distressed
Employees 141,000

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