Boeing Fails to Meet Expectations with Fourth Quarter Results

The Boeing Company (NYSE: BA) has released its financial results for the fourth quarter of 2024, revealing a challenging period for the aerospace giant. The company reported revenue of $15.2 billion, significantly impacted by various factors such as the International Association of Machinists and Aerospace Workers (IAM) strike and agreement, charges in certain defense programs, and costs related to workforce reductions.

These elements contributed to a GAAP loss per share of $5.46 and a core loss per share of $5.90. Operating cash flow was negative at $3.5 billion, with cash and marketable securities totaling $26.3 billion by the end of the quarter.

Boeing’s Fourth Quarter Results Fail to Live Up to Expectations

Boeing’s commercial airplanes segment faced a substantial decline in deliveries, with only 57 aircraft delivered compared to 157 in the same period last year. This resulted in a 55% drop in revenue for the segment, totaling $4.8 billion. The defense, space, and security segment also experienced a 20% decrease in revenue, amounting to $5.4 billion. Meanwhile, the global services segment reported a 6% increase in revenue, reaching $5.1 billion, attributed to higher commercial volume and product mix.

The fourth quarter results were notably below market expectations, with an anticipated earnings per share (EPS) of $-1.74. Instead, Boeing reported a GAAP loss per share of $5.46, a significant deviation from projections.

The revenue of $15.2 billion also fell short of expectations, highlighting the adverse effects of operational disruptions and strategic challenges faced during the quarter. The variance from expectations can be attributed to several key factors. The IAM work stoppage not only affected production schedules but also led to increased costs due to the agreement reached to resume operations.

Additionally, charges related to defense programs and workforce reduction costs further weighed on the financial performance. These elements collectively contributed to the wider-than-expected losses.

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Boeing Plans to Gradually Increase Production Rates

The company has outlined plans to gradually increase production rates, particularly for the 737 program, which resumed production during the quarter. The 787 program is also set to expand its operations in South Carolina, with a production rate of five per month.

The 777X program has resumed FAA certification flight testing, targeting the first delivery of the 777-9 in 2026.Boeing’s backlog remains robust, with a total company backlog of $521 billion, including over 5,500 commercial airplanes valued at $435 billion.

This strong order book provides a foundation for future growth and recovery. However, the company acknowledges the need to address ongoing challenges in its defense, space, and security segment, which faced significant charges on key programs.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.