Boeing braces for second heaviest loss on record
January 24, 2025
Thursday saw Boeing announce its preliminary fourth quarter results with revenue of US$15.2 billion and an anticipated stock drop of US$5.46 per share. According to the Seattle Times, the Q4 results mean the airframe giant lost around US$11.8 billion in 2024, its second heaviest loss on record.
Boeing’s fourth quarter (Q4) cash outflow of $3.5 billion brings its total cash burn for 2024 to a staggering $13.7 billion, with the OEM attributing the financial strain to a combination of lost revenue from the International Association of Machinists and Aerospace workers (IAM) strike, workforce reduction costs, and additional charges in its Defence, Space and Security division.
The company’s preliminary Q4 results show it expects to report revenue of US$15.2 billion (analysts had been estimating US$16.3 billion), a slip of US$5.46 per share and negative operating cash flow of US$3.5 billion. At the end of the quarter, Boeing’s cash and investments in marketable securities stood at US$26.3 billion.
New future for Boeing
Responding to the financial results, Boeing CEO, Kelly Ortberg, commented: “Although we face near-term challenges, we took important steps to stabilise our business during the quarter including reaching an agreement with our IAM-represented teammates.”
He added that the company remains focused on the “hard work ahead to build a new future for Boeing,” as he referenced that production of the 737, 767 and 777/777X has already restarted and capital has been raised to strengthen the company’s balance sheet.
The IAM work stoppage and agreement was blamed for having a significant impact on Boeing’s Commercial Airplanes division, resulting in lower deliveries and pre-tax earnings charges of US$1.1 billion. This includes a US$900 million pre-tax charge on the 777X programme, reflecting higher estimated labour costs tied to the IAM agreement, which will be incurred over several years. Prior to the Machinists strike, the OEM was also hit last year by a delay to deliveries of its 737 MAX after a fuselage panel on an Alaska Airlines flight blew out in midair, which resulted in the Federal Aviation Administration (FAA) halting MAX production. Despite these setbacks, Boeing reiterated on Thursday that it is getting back on track with delivery of the first 777-9 slated for 2026.
The Commercial Airplanes division is expected to report Q4 revenues of US$4.8 billion, with an operating margin of 43.9%.
Defence, Space & Security
For its Defence, Space & Security division, Boeing is expecting to report revenue of US$5.4 billion for Q4 with an operating margin of 41.9%. It will also report pre-tax charges of US$1.7 billion across multiple programmes, including the KC-46A which will account for US$800 million in pre-tax charges due to high manufacturing costs, including those related to the IAM work stoppage. Meanwhile, the T-7A programme will see a US$500 million pre-tax charge due to increased production cost estimates for future lots.
The company will officially announce its Q4 financial results on 28 January.
