Financial Setbacks Deepen
Boeing is bracing for a significant Boeing quarterly loss of $4 billion in the fourth quarter of 2024, further exacerbating the challenges faced by the aerospace giant. The company announced on Thursday that it anticipates a loss of $5.46 per share for the quarter, falling short of analysts’ expectations. Revenue is projected at $15.2 billion, below the $15.9 billion forecast by analysts, according to LSEG estimates. Additionally, Boeing expects to report a cash burn of $3.5 billion during the quarter, a reflection of its operational struggles. To manage its liquidity, the company raised over $20 billion during the quarter.
Boeing has been unable to post an annual profit since 2018, with its financial woes compounded by recent crises. The company revealed it will incur a $1.1 billion charge related to its 777X and 767 programs, largely due to a prolonged machinists’ strike and the costs associated with a newly negotiated labor contract. Despite the losses, Boeing CEO Kelly Ortberg emphasized progress in stabilizing the business, citing successful capital raises and improved agreements with unionized workers.
Operational Challenges and Midair Safety Crisis
The year 2024 has proven particularly turbulent for Boeing, beginning with a safety crisis in January when a door plug blew out midair. This incident reignited federal scrutiny, impacting the company’s reputation and slowing the delivery of new aircraft. The crisis unfolded as Boeing was attempting to recover from the fallout of two fatal crashes in 2018 and 2019, which had already tarnished its safety record.
Adding to its challenges, a nearly two-month machinists’ strike starting in September halted most commercial aircraft production. The strike, centered in the Puget Sound area, concluded in November with workers securing a new contract. However, the disruption further hindered Boeing’s ability to meet production targets. This added to the Boeing quarterly loss. The commercial airplane division, a cornerstone of Boeing’s operations, is expected to post revenues of $4.8 billion, accompanied by a negative operating margin of nearly 44%.
Defense and Space Programs Under Pressure
Boeing’s financial difficulties are not confined to its commercial division. The company’s defense unit is also grappling with significant setbacks, with expected pretax charges of $1.7 billion tied to multiple programs. These include the KC-46A tanker, the delayed 747 aircraft slated to serve as the new Air Force One, and space initiatives.
The combined challenges across commercial, defense, and space sectors underscore the magnitude of the issues confronting Boeing as it struggles to regain stability. Despite the tumultuous year, CEO Ortberg remains cautiously optimistic, highlighting steps taken to stabilize operations and improve the company’s financial standing.
As Boeing navigates the aftermath of a chaotic 2024, the focus will be on rebuilding investor confidence, addressing safety concerns, and managing labor relations to position itself for recovery in 2025 and beyond. The Boeing quarterly loss highlights the challenges faced, making these efforts crucial for future stability and growth.
