Boeing [NYSE: BA] today announced its preliminary fourth quarter financial results, revealing significant impacts from the recent International Association of Machinists (IAM) strike.
The company expects to report revenue of $15.2 billion, a GAAP loss per share of ($5.46), and negative operating cash flow of ($3.5) billion. The estimate comes in below analyst predictions of a Q4 revenue of $16.3 billion, with Boeing significantly bruised by the protracted strike action of late 2024.
The IAM strike, which lasted for nearly two months, significantly disrupted Boeing’s production lines, particularly impacting the 777X and 767 programs. The company anticipates pre-tax earnings charges of $1.1 billion related to the strike, with the 777X program alone accounting for $0.9 billion.
This charge reflects increased labor costs associated with finalizing the agreement, which will be incurred over the coming years. Despite these setbacks, Boeing remains committed to the 777X program, maintaining its anticipated first delivery in 2026.
“While we encounter near-term hurdles, we have taken decisive action to stabilize our operations,” stated Kelly Ortberg, Boeing President and CEO.
“This includes reaching a mutually beneficial agreement with our IAM-represented workforce and successfully raising capital to strengthen our financial position.”
The strike’s impact extended beyond production delays. It also led to lower aircraft deliveries, further impacting the company’s bottom line. Commercial Airplanes, a key segment for Boeing, is expected to report a significant operating margin of (43.9) percent in the fourth quarter, reflecting the challenges faced.
The IAM Strike: A Closer Look
The recent IAM strike, which involved approximately 30,000 workers across various Boeing Pacific Northwest facilities, significantly disrupted production lines and impacted several key programs. The strike stemmed from disagreements over wages, benefits, and job security.
Production Halted
The strike brought production to a near standstill at several Boeing plants, including those producing the 737 MAX, 767, and 777X aircraft. This led to significant delays in aircraft deliveries, impacting both commercial and defense programs.
Financial Fallout
The strike had a substantial financial impact on Boeing. Production delays resulted in lost revenue and increased costs. The company incurred significant costs related to lost productivity, missed deadlines, and the need to expedite production once the strike ended.
Customer Impact
The strike also impacted Boeing’s customers. Airlines that had placed orders for Boeing aircraft faced potential delays in receiving their deliveries, potentially impacting their operations and revenue.
Looking Ahead
Despite the challenges posed by the strike, Boeing remains committed to stabilizing its operations and executing its long-term strategy.
The company has taken steps to mitigate the impact of the strike, including implementing measures to accelerate production and minimize further disruptions.
Following a tumultuous 2024 marked by safety concerns, production setbacks, and increased regulatory scrutiny, Boeing faces a critical year in 2025. The US plane manufacturer significantly trailed rival Airbus in commercial aircraft deliveries, delivering less than half their total for the year.
Boeing must now prioritize regaining market share and rebuilding its reputation to overcome the significant ground lost in the previous year.
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