Boeing Co. is so buoyed by its second-quarter earnings, that it said it would boost production of the 737 jets.
That particular narrow-body plane is its most popular and best-selling.
Shares in the company rose seven percent. But, more importantly, it beat Wall Street expectations. As we saw with Alaska Airlines, making a profit and beating Wall Street expectations are two different things.
At one point, Boeing stock’s price rose to its highest level in 18 months.
Boeing did say, however, that it will take months for its production facilities to catch up. Still, executives say they plan to build 38 737-MAX jets per month, up from 31 planes per month.
"That's a big important move, and there'll be subsequent rate breaks beyond that," said CEO Dave Calhoun. "All of that is going to play into a margin trajectory that's going to start to look a lot more normal."
The company is preparing to raise that to 42 planes per month but did not specify when. But Reuters News Service previously reported that the company would like to up production to 47 per month, sometime next year. Of course, much depends on outside factors, including delivery from parts manufacturers.
"The overall outlook is unchanged, but the results from the Commercial Aerospace division is encouraging, particularly in light of the ongoing supply chain challenges," Third Bridge analyst Peter McNally said. "Boeing's execution has improved, and it will need to continue on this path to turn the corner on sustained profitability."
Boeing is under the gun to produce more of the 737 MAX Jets because it has more than 200 of those in inventory that is promised to be delivered. Boeing’s biggest competitor, Airbus, does not have a plane to rival the narrow-body 737 although it is working on one.
The company’s revenue for the second quarter beat the Wall Street expectations by more than $1 billion.
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