What happened

Shares of Boeing (NYSE:BA) are soaring today, up by 4.9% as of 12:45 p.m. EDT, after the company released its Q2 report. Investors were caught by surprise when Boeing turned profitable in the second quarter even though its backlog value isn't growing much. 

So what

Boeing trumped analyst estimates this morning, with core operating earnings of $755 million for its second quarter compared to an operating loss of $3.3 billion in the year-ago period. Boeing earned $0.40 in operating earnings per share versus analysts' consensus estimate of an operating loss of $0.72 per share.

Boeing's second-quarter revenue shot up 44% year over year to $17 billion, driven by a surge in commercial airplane deliveries -- Boeing delivered 79 commercial planes versus only 20 in Q2 2020, including 47 737 MAX aircraft.

That means Boeing has, so far, delivered more than 130 737 MAX planes since the Federal Aviation Administration cleared the plane to fly last November following nearly 20 months of grounding. "We were also encouraged to see commercial customers make long-term investments and reinforce confidence in the 737 MAX, through more than 280 gross orders this quarter," said CEO Dave Calhoun in a message to employees.

With customer interest picking up and 30 airlines now already flying 737 MAX aircraft, Boeing expects to nearly double production to 31 per month beginning early next year.

So far, so good, but there were pockets of concern in Boeing's Q2 report.

A flight attendant in a mask giving safety briefing on an airplane.

Image source: Getty Images.

First, Boeing reported only 180 net new orders for commercial planes, which means order cancellations remain high. Boeing's commercial planes backlog in Q2 was around 4,100 planes worth $285 billion in Q2 versus over 4,000 planes worth $283 billion in Q1.

Second, Boeing's 787 Dreamliner continues to have problems, which is why its commercial planes unit reported negative operating margin of 7.8% in Q2 despite solid top-line growth. Bowing expects additional work on 787s and could deliver less than 50% its 787 inventory this year. Until its first quarter, Boeing had expected to deliver a majority of its 100 787s in 2021.

Third, although Boeing's defense, space, and security division reported a higher operating margin of 13.9%, its backlog value dropped $2 billion sequentially to $59 billion in Q2.

Finally, Boeing's debt remained unchanged at $63.6 billion, as it borrowed nearly as much as it repaid in debt last quarter.

Now what

Boeing continued to burn cash in the second quarter, though its operating cash outflow of $0.5 billion and negative free cash flow of $705 million were among the lowest in several quarters. 

The question investors need to ask right now is: Was this a one-off good quarter, or can Boeing sustain momentum amid the COVID-19 pandemic that's throttled air travel? 2021 is still a low production year for 737s, wide-body 787s are mired in problems, and Boeing still owed customers $3.9 billion as of the end of the second quarter. These are just some of the things investors should keep an eye on going forward.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.