Boeing Announces New CEO and Reports Larger-than-Expected Q2 Loss

(Updated – July 31, 2024 9:43 AM EDT)

Boeing has announced the appointment of Kelly Ortberg as its new President and CEO, effective August 8, 2024, leading to a more than 2% increase in the company’s stock despite a recent earnings and revenue shortfall. Ortberg will also take a seat on Boeing’s board of directors.

He will replace Dave Calhoun, who has indicated his intention to retire after serving as the company’s president and CEO since January 2020.

With over 35 years of experience in aerospace leadership, Ortberg began his career as an engineer at Texas Instruments in 1983. He joined Rockwell Collins in 1987, progressing through various leadership roles before becoming president and CEO in 2013. Additionally, Ortberg has held the position of Chair of the Aerospace Industries Association (AIA) Board of Governors.

Steven Mollenkopf, Chair of the Board, remarked, "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." Mollenkopf emphasized Ortberg’s reputation in the aerospace industry for building strong teams and managing complex engineering and manufacturing operations.

Expressing his enthusiasm, Ortberg stated, "I’m extremely honored and humbled to join this iconic company. There is much work to be done, and I’m looking forward to getting started."

In its latest quarterly report, Boeing indicated a Q2 EPS loss of $2.90, falling short of the analyst estimate of $1.69. Revenue stood at $16.9 billion, below the consensus forecast of $17.39 billion. These results mainly stemmed from a drop in commercial delivery volume and losses in fixed-price defense development programs.

Despite the challenging quarter, Calhoun noted that the company is making significant strides in strengthening its quality management systems and positioning itself for the future. Boeing currently has a total backlog of $516 billion, which includes over 5,400 commercial airplanes.

Following the announcement of the new CEO, analysts at Vertical Research Partners noted that the disappointing Q2 results may not receive much attention, with the focus shifting to the leadership transition. They stated, "We think Kelly Ortberg is a very good hire by Boeing, bringing extensive A&D experience and a proven track record of fostering a positive corporate culture. Although there are significant challenges ahead, his leadership could provide a path to resolving them."

Analysts from TD Cowen remarked that the CEO announcement was somewhat premature but underscored the potential positive reception among investors, especially regarding the upcoming negotiation of a labor contract.

Finally, analysts at Stifel indicated that while Ortberg emerged as a later candidate in the selection process, they view his appointment positively due to his engineering background and his status as a Boeing outsider.