Boeing Announces New CEO, Posts $1.4 Billion Quarterly Loss

Boeing 737 Max aircraft are assembled at the Boeing Renton Factory in Renton, Wash., on June 25, 2024. (Jennifer Buchanan/AFP via Getty Images)

Boeing on Wednesday reported a quarterly loss of more than $1 billion while naming aerospace industry veteran Robert “Kelly” Ortberg as its new CEO and president, at a time the plane making giant faces headwinds from a combination of legal, regulatory, and production issues.

Ortberg, a former CEO at Boeing supplier Rockwell Collins, will take over from current Boeing CEO and president David Calhoun on Aug. 8, the company said in a July 31 statement.

“There is much work to be done, and I’m looking forward to getting started,” Ortberg said in a statement, adding that he’s “honored and humbled” to have been elected by Boeing’s board of directors to the company’s top job.

Earlier this year, Calhoun announced his intention to retire from the company, after having served as the iconic planemaker’s president and CEO since January 2020.

Boeing said Calhoun will stay on as an adviser to the board until next March.

Steven Mollenkopf, chair of the Boeing board, said in a statement that Ortberg was picked after a “thorough and extensive” search and that the board is confident he has the right skills and experience to lead the company.

“The Board would also like to thank Dave Calhoun for his strong leadership at Boeing, first as Chair and then as CEO, when he stepped in to steer the company through the challenges of recent years,” Mollenkopf said.

He said he looks forward to working with Ortberg as the company navigates what he described as a “consequential” period in its long history.

The leadership change comes at a turbulent time for Boeing. This month, the company agreed to plead guilty to a federal fraud charge in connection with the development of its 737 Max jetliner and two crashes that killed 346 people. The Federal Aviation Administration increased its oversight of the company after a door plug blew out mid-flight on one of its planes, raising manufacturing quality concerns.

The announcement of Ortberg’s appointment came on the same day that Boeing reported a loss of over $1.4 billion during the second quarter due to falling revenue, with the company’s commercial airplanes business and its defense unit both losing money.

The loss was wider and revenue lower than Wall Street expected, though the company’s share price was up over 1.5 percent in morning trading, with investor sentiment possibly buoyed by the leadership switch.

Excluding special items, Boeing’s loss for the quarter came to $2.90 per share, which was higher than the $1.90 per share loss anticipated by analysts in a FactSet survey.

Revenue decreased by 15 percent to $16.87 billion, missing Wall Street’s average estimate of $17.35 billion.

Boeing’s commercial airplane division posted an operating loss for the quarter of $715 million as the company delivered fewer passenger jets to airlines and revenue dropped 32 percent.

The company’s defense, space, and security unit lost $913 million, driven mostly by losses on certain fixed-price development programs, including a $391 million loss on Boeing’s KC-46 Pegasus military aerial refueling and strategic transport aircraft, which faced supply chain constraints and production issues.

Boeing’s global services unit, which provides a wide range of services to both commercial and defense customers like aircraft modification and pilot training, posted an operating profit of $870 million, with revenues up 3 percent.

“Despite a challenging quarter, we are making substantial progress strengthening our quality management system and positioning our company for the future,” Calhoun said in a statement.