01—Abstract
Summary
Summary of the 10-Q filed July 28, 2021. Cited figures are marked; the original filing is the authoritative source.
Boeing's Q2 2021 report shows a significant turnaround from the prior year, with net earnings attributable to shareholders reaching $50 milliona ($0.09 per diluted share) compared to a loss of $3,004 million ($5.31 per diluted share) in the same period of 2020.
Total revenues increased by 12% year-over-year to $16.998 billionb for the quarter, driven primarily by higher deliveries in the Commercial Airplanes (BCA) segment as the 737 MAX returned to service in more jurisdictions, and strong performance in Defense, Space & Security (BDS). Despite the improved profitability, the company continues to navigate significant challenges. Net cash used by operating activities for the first six months of 2021 was $3.9 billion, indicating ongoing cash burn.
The company's liquidity remains a key focus, with substantial unused borrowing capacity available. While the 737 MAX situation is improving with increased deliveries, certain non-U.S. jurisdictions still prohibit its operation. Additionally, production issues with the 787 program have led to a pause in deliveries and increased inventory.
Overall, the report signals a recovery in revenue and a return to profitability, largely due to increased aircraft deliveries. However, investors should remain aware of the ongoing operational challenges, inventory build-up, and the continued impact of the pandemic on the aerospace industry, which contribute to negative operating cash flow.
02—Key points
Key Highlights
- Boeing reported a net profit of $50 million for Q2 2021, a substantial improvement from a net loss of $3,004 million in Q2 2020.
- Total revenues increased by 12.1% to $16.998 billion for the quarter, driven by higher deliveries in Commercial Airplanes and Defense, Space & Security segments.
- The Commercial Airplanes segment saw a significant reduction in operating loss, primarily due to higher 737 MAX deliveries and customer considerations in the prior year.
- Defense, Space & Security segment's operating earnings increased substantially, benefiting from higher program revenues and the absence of charges seen in the prior year.
- Despite improved earnings, the company utilized $3.9 billion in cash from operating activities in the first six months of 2021.
- The company's inventory of 737 MAX and 787 aircraft remains elevated, with ongoing production and delivery challenges impacting cash flow.
- Boeing maintained significant liquidity, with $8.3 billion in cash and $13.1 billion in short-term investments, and $14.8 billion in unused borrowing capacity at the end of the quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2021, Boeing Co kept $0.03.
- Revenue$17.00B100.0%
- Cost of revenue−$14.59B85.8%
- Gross profit$2.41B14.2%
- Operating costs−$1.39B8.2%
- Operating income$1.02B6.0%
- Interest, other & tax−$436.0M2.6%
- Net income$587.0M3.5%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2021filed July 28, 2021Financial Statements
Q2 FY2021 against Q2 FY2020
| Line item | Q2 FY2021Q2 FY2020 | Change |
|---|---|---|
| Revenue | $17.00B$11.81B | +44.0% |
| Cost of Revenue | $14.59B$12.98B | +12.4% |
| Gross Profit | $2.41B-$1.17B | +305.8% |
| R&D Expenses | $497.00M$625.00M | −20.5% |
| Operating Income | $1.02B-$2.96B | +134.5% |
| Net Income | $587.00M-$2.38B | +124.7% |
| EPS (Basic) | $1.00$-4.20 | +123.8% |
| EPS (Diluted) | $1.00$-4.20 | +123.8% |
| Shares Outstanding (Basic) | 587.50M565.90M | +3.8% |
| Shares Outstanding (Diluted) | 589.80M565.90M | +4.2% |
05—Questions
Frequently Asked Questions
What is Boeing's financial performance for the second quarter of 2021 compared to the previous year?
In the second quarter of 2021, Boeing reported a net earnings of $587 million ($1.00 per diluted share), a significant improvement from a net loss of $2,376 million ($4.20 per diluted share) in the same quarter of 2020. Total revenues also increased by approximately 44% year-over-year to $16.998 billion.
What were the main drivers of the revenue increase in Q2 2021?
The revenue increase was primarily driven by higher deliveries in the Commercial Airplanes (BCA) segment, largely due to the recertification and return to service of the 737 MAX in many jurisdictions, as well as increased revenues in the Defense, Space & Security (BDS) segment.
What is the current status of Boeing's inventory and operating cash flow?
Boeing still holds a significant amount of inventory, particularly for the 737 MAX and 787 aircraft, which has been exacerbated by production issues and delivery pauses. For the first six months of 2021, Boeing used $3.9 billion in cash from operating activities, indicating ongoing cash burn despite returning to profitability.
How is Boeing managing its liquidity and debt?
Boeing has taken steps to preserve liquidity, including debt issuances and managing expenses. As of June 30, 2021, the company had $8.3 billion in cash and $13.1 billion in short-term investments, along with substantial unused borrowing capacity on its credit lines. The total debt balance was $63.6 billion.
06—Continue