Boeing Share Price Takes a Hit After 2nd Quarter $2.4billion Loss

Summary:

Boeing's earnings report shows a loss of $2.4billion as the pandemic bites hard on new aircraft orders, amid aviation shutdown.

Boeing share price has taken a hit today after the company posted a net loss of $2.4billion, amid slowing aircraft production, a decline in new orders and coronavirus-associated demand drop-off.

Boeing reported the results in its earnings report released earlier today. Losses per share exceeded expectations, with $4.79 loss for every Boeing share reported as against a market expectation of r$2.54 per share. Furthermore, revenues came in at $11.8 billion versus $13.16 billion that the markets had expected, representing a 25% drop.

Boeing’s woes started with the crash of its 737 Max aircraft belonging to Ethiopian Airlines, leading to a global grounding of the plane after software flaws in its autopilot system were detected. Despite the company’s efforts to get the aircraft recertified, it remains grounded. Boeing share price is also feeling the pinch from a decline in demand for its 787 Dreamliner aircraft.

However, the downside to the stock on the day remains limited, as the $2.4billion loss was less than the loss announced a year ago.

Boeing share price is down 3.16% on the news.

Technical Outlook for Boeing

The drop in Boeing’s share price is challenging the 164.32 support level. A breakdown of this price level opens the pathway towards 151.64 and possibly 139.14, especially if the descending triangle that is currently in evolution eventually plays out to expectation. A drop to 119.13 may be extreme but would fulfil the price objectives following the breakdown of the triangle.

On the flip side, a recovery bounce could allow for a recovery towards 186.40, with 204.32 remaining relevant to any potential recover moves. Boeing CEO Dave Calhoun remains hopeful that demand could improve by 2H 2021 while hinting that the 737 Max recertification is progressing smoothly. Successful recertification may provide a fundamental basis for short term recovery.