- Boeing reported a $3.8 billion loss in Q4, continuing financial difficulties since 2019.
- The loss was attributed to labor stoppages, job cuts, and issues with government programs.
- A strike by machinists and manufacturing quality issues hampered Boeing’s delivery capability, a crucial revenue source.
- Despite these challenges, a slight increase in share value indicates investor faith in Boeing’s recovery potential.
Boeing, the globally recognized aircraft manufacturer, recently disclosed a substantial loss of $3.8 billion in the fourth quarter. This loss is a continuation of the company’s financial difficulties, which have been ongoing since 2019. The company’s financial troubles began following the fatal crashes of two of its then-new Max jets, which resulted in the tragic loss of 346 lives. Since these unfortunate incidents, Boeing has reported losses exceeding $35 billion.
The financial figures released by Boeing align with the company’s pre-reported estimates from the previous week. These estimates included nearly $3 billion in charges for the quarter, attributed to a labor stoppage, job cuts, and issues with several government programs. The company’s loss per share stood at $5.46, significantly higher than the $3.08 loss anticipated by Wall Street analysts, as per data firm FactSet.
The fourth quarter marked the end of a challenging year for Boeing. The company faced a strike by machinists responsible for assembling the best-selling 737 Max, along with the 777 jet and the 767 cargo plane at factories in Renton and Everett, Washington. This strike halted production at these facilities and impeded Boeing’s delivery capability, a crucial aspect of the company’s operations.
Boeing’s Financial Woes and Labor Issues
Deliveries are a significant source of revenue for aircraft manufacturers, as buyers typically pay a large portion of the purchase price when their orders are fulfilled. However, Boeing’s delivery capability was severely hampered due to the strike, which lasted for over seven weeks. The strike eventually ended when the company agreed to pay raises and improved benefits.
Boeing’s financial report also revealed that the company took charges totaling $1.1 billion related to the 777 and 767 programs in the fourth quarter. Additionally, Boeing incurred an extra $1.7 billion in charges related to several government programs, including a military refueling tanker and Air Force One replacement jets.
The company’s revenue for the fourth quarter totaled $15.2 billion, falling short of analysts’ updated estimate of $15.7 billion, according to FactSet. The full-year revenue was reported at $66.5 billion, marking a 14% decline from 2023.
Production Halt and Sales Impact
Boeing’s production woes were not limited to labor issues. The company had planned to ramp up production in 2024 until a panel called a door plug blew off a 737 Max shortly after takeoff from Portland, Oregon, in early January. This incident led the Federal Aviation Administration to cap production of Max jets until Boeing could assure federal regulators that it had addressed manufacturing quality and safety issues.
The company’s financial and reputational damage extended to sales of new aircraft. Boeing received no 737 Max orders for at least two months and ended the year far behind Airbus in total net orders for commercial planes, an indicator that factors in cancellations.
Despite these challenges, shares of Boeing Co, based in Arlington, Va., nudged up less than 1% before the opening bell. This slight increase in share value indicates that investors may still have faith in the company’s ability to recover.