Boeing warns of Q4 loss almost three times bigger than expected
By Josh White
Date: Friday 24 Jan 2025
(Sharecast News) - Boeing warned of a significantly larger-than-expected fourth-quarter loss overnight on Friday, of around $4bn - nearly three times the size forecasted by analysts.
The aerospace giant attributed the downturn to a number of challenges, including production quality issues, regulatory scrutiny, supply chain disruptions, and a prolonged labour strike that disrupted operations at key manufacturing sites.
It said it expected to report a loss of $5.46 per share on quarterly revenue of $15.2bn, falling short of Wall Street's projections of $1.84 per share in losses and $16.27bn in revenue.
The company said it anticipated burning through $3.5bn in cash during the quarter.
Boeing had a challenging 2024, starting the year dealing with the fallout from a mid-air panel blowout on a newly-delivered Alaska Airlines 737 MAX, further compounding the lingering effects of two fatal crashes in 2018 and 2019.
The firm had not posted an annual profit since 2018, and through the first nine months of 2024 had already accumulated nearly $8bn in losses.
Boeing's commercial airplane division was expected to generate $4.8bn in revenue for the quarter, but would post an operating margin loss of nearly 44%.
The unit delivered 348 jets in 2024, a sharp decline from 528 in the prior year.
Orders also fell significantly, though the company secured a major deal with Turkey's Pegasus Airlines, which placed a firm order for 100 737 MAX aircraft.
The company announced a $1.1bn charge on its 777X and 767 programs, primarily due to increased labour costs associated with the strike resolution.
Additionally, Boeing's defence unit was facing $1.7bn in pre-tax charges across multiple programmes, including the KC-46 tanker, T-7 trainer, MQ-25 refueling drone, the Air Force One replacement project, and the Starliner capsule for NASA.
Despite the setbacks, Boeing chief executive officer Kelly Ortberg said the company had taken significant steps to stabilise the business.
"Although we face near-term challenges, we took important steps to stabilize our business during the quarter including reaching an agreement with our IAM-represented teammates and conducting a successful capital raise to improve our balance sheet," he said in the company's release.
The resolution of the machinists' strike in November allowed production of key aircraft models to resume, and the company successfully raised over $20bn to strengthen its financial position.
Boeing's defence, space and security division was expected to post quarterly revenue of $5.4bn with an operating margin loss of nearly 42%.
The KC-46 tanker programme, based on the 767 airframe, would incur an $800m charge, while the T-7 trainer program would take a $500m hit due to delayed orders from the US Air Force.
Looking ahead, Boeing said it aimed to deliver the first 777-9 in 2026, a significant delay from its original schedule when the programme was launched in 2013.
Shares in the Boeing Company closed up 2.12% in New York on Thursday, but were down 1.82% by the end of after-hours trading at 2000 EST, at $175.25.
Reporting by Josh White for Sharecast.com.
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