Boeing (NYSE: BA) has announced a significant leadership change along with a wider-than-anticipated loss for the second quarter of 2024. Despite the financial setback, Boeing shares surged over 2 per cent in premarket trading following the announcement of Kelly Ortberg as the company’s new President and CEO.
Kelly Ortberg will assume the role of President and CEO effective August 8, 2024, and will join Boeing’s board of directors. Ortberg succeeds Dave Calhoun, who announced his retirement earlier this year after serving as CEO since January 2020.
Ortberg brings over 35 years of experience in aerospace leadership. He began his career as an engineer at Texas Instruments in 1983 before joining Rockwell Collins in 1987. At Rockwell Collins, Ortberg held various leadership positions, ultimately becoming President and CEO in 2013. He also served as Chair of the Aerospace Industries Association (AIA) Board of Governors.
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“The Board conducted a thorough and extensive search process over the last several months to select the next CEO of Boeing, and Kelly has the right skills and experience to lead Boeing in its next chapter,” said Steven Mollenkopf, Chair of the Board. Mollenkopf emphasised Ortberg’s industry experience and his reputation for building strong teams and managing complex engineering and manufacturing operations.
“I’m extremely honoured and humbled to join this iconic company,” Ortberg stated. “There is much work to be done, and I’m looking forward to getting started.”
In its latest quarterly results, Boeing reported a Q2 earnings per share (EPS) of ($2.90), which was significantly worse than the analysts’ estimate of ($1.69). The company’s revenue for the quarter was $16.9 billion, falling short of the consensus estimate of $17.39 billion.
Boeing attributed these results to lower commercial delivery volumes and losses on fixed-price defence development programmes. Despite the disappointing financial performance, CEO Dave Calhoun highlighted the company’s efforts to improve its quality management system and position itself for future success.
“Despite a challenging quarter, we are making substantial progress strengthening our quality management system and positioning our company for the future,” Calhoun said.
Boeing’s total backlog remains robust at $516 billion, including orders for over 5,400 commercial aeroplanes. The market reacted positively to the leadership change, with investors showing confidence in Ortberg’s ability to navigate the company through its current challenges.
As Boeing faces new challenges and market conditions remain volatile, investors are increasingly cautious. Valuations have surged in 2024, making it difficult for investors to identify promising opportunities. However, tools like Investing.com’s ProPicks can help investors discover high-potential stocks. For example, ProPicks identified nine overlooked stocks that have jumped over 25% this year alone.
Boeing’s announcement of Kelly Ortberg as the new CEO comes at a critical time for the company. While the Q2 financial results were disappointing, the leadership transition is seen as a positive step toward addressing ongoing challenges and driving future growth. Investors will be closely watching how Ortberg steers Boeing through its next chapter.
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