Boeing’s third quarter results for 2024 were marked by significant challenges, primarily stemming from the International Association of Machinists and Aerospace Workers (IAM) work stoppage and previously announced charges on commercial and defense programs. These factors combined to create a challenging financial landscape for the aerospace giant.
The company reported a revenue of $17.8 billion, representing a 1% fall. It recorded a GAAP loss per share of ($9.97). The IAM work stoppage and program charges had a substantial impact on Boeing’s bottom line.
Boeing reported a $US 6.7 billion net loss for the quarter. This represents the second highest quarterly loss for the US plane manufacturer since mid-2018. Operating cash flow was ($1.3) billion, and free cash flow was ($2.0) billion.
Commercial Aircraft Division
The commercial airplanes segment faced particularly difficult conditions. Revenue of $7.4 billion and an operating margin of (54.0) percent were recorded. This was largely due to pre-tax charges of $3.0 billion on the 777X and 767 programs.
The company now anticipates first delivery of the 777-9 in 2026 and the 777-8 freighter in 2028, resulting in a pre-tax earnings charge of $2.6 billion.
The IAM work stoppage, which has extended for nearly six weeks and higher period expenses further impacted the commercial aircraft division across the quarter.
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Despite these challenges, Boeing’s 787 program continued to make progress. Production is currently at 4 per month, with plans to increase to 5 per month by year-end. The company also booked 49 net orders and delivered 116 airplanes in the quarter, maintaining a significant backlog of over 5,400 airplanes valued at $428 billion.
To bolster its financial position, Boeing entered into a new $10.0 billion short-term credit facility in October. This brings its total credit facilities to $20.0 billion, which remain undrawn.
Challenges Ahead
Looking ahead, Boeing’s CEO, Kelly Ortberg, acknowledged the challenges facing the company but expressed optimism about its future. “It will take time to return Boeing to its former legacy,” Ortberg said, “but with the right focus and culture, we can be an iconic company and aerospace leader once again.”
Notably, Boeing’s third quarter financials were released some hours ahead of the news that striking workers voted to reject the latest labor contract proposal. This now prolongs industrial action that has gone on for almost six weeks.
As Boeing navigates turbulent times, its ability to address the underlying issues, improve program execution, and restore investor confidence will be crucial to its long-term success.
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