Despite reporting an earnings and revenue miss on Wednesday, Boeing (NYSE:BA) shares are up more than 2% after the company announced it had chosen Kelly Ortberg as its new President and CEO.
Ortberg will start in the role effective August 8, 2024, and will also serve on Boeing's board of directors.
Ortberg will succeed Dave Calhoun, who earlier this year announced his intention to retire from the company, having served as president and CEO since January 2020.
Ortberg has more than 35 years of aerospace leadership experience. He began his career in 1983 as an engineer at Texas Instruments, then joined Rockwell Collins in 1987 as a program manager and held various leadership positions at the company before becoming its president and CEO in 2013.
Ortberg is also the former Chair of the Aerospace Industries Association (AIA) Board of Governors.
"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 highlighted Ortberg's experience and standing in the aerospace industry, noting his "well-earned reputation for building strong teams and running complex engineering and manufacturing companies."
"I'm extremely honored and humbled to join this iconic company," said Ortberg. "There is much work to be done, and I'm looking forward to getting started."
In Boeing's latest quarterly results, the company posted Q2 EPS of ($2.90), $1.21 worse than the analyst estimate of ($1.69). Revenue for the quarter came in at $16.9 billion versus the consensus estimate of $17.39 billion.
Boeing said the results primarily reflect its lower commercial delivery volume and losses on fixed-price defense development programs.
"Despite a challenging quarter, we are making substantial progress strengthening our quality management system and positioning our company for the future," said Dave Calhoun, Boeing president and chief executive officer.
The company's total backlog is $516 billion, including over 5,400 commercial airplanes.
Following today's news, analysts at Vertical Research Partners said they "doubt if Boeing’s pretty awful 2Q results will get that much attention today,
with all the focus being on the CEO news."
"In our view, Kelly Ortberg is very good hire by Boeing," said the firm. "What he brings to the party is not only a wealth of A&D experience, but also a track record of running a company with an excellent corporate culture. Clearly there are a massive number of problems at Boeing, but with Kelly as CEO we think there is at least a chance of fixing them."
Meanwhile, analysts at TD Cowen said the announcement of the CEO "looks early." The bank stated: "[The] announcement of well-regarded engineer Kelly Ortberg as BA CEO (eff. 8/8/24) is a bit earlier than expected. We think investors will like the change (and timing), particularly if it's helpful in achieving a peaceful IAM contract renegotiation."
Finally, analysts at Stifel said Ortberg emerged as a late contender, but they "believe his selection is positive as he has both an engineering background and is a Boeing outsider."