Boeing has announced expectations of a greater-than-anticipated financial loss for the fourth quarter, citing multiple challenges, including lower aircraft deliveries, labor disruptions, and mounting costs in its defense unit. Boeing now projects a fourth-quarter loss of $5.46 per share, far exceeding analysts’ forecast of $1.84 per share. According to a report from Reuters, revenue is also anticipated to fall short of expectations, coming in at $15.2 billion compared to the projected $16.27 billion.
The announcement comes during a tumultuous period for the U.S. aerospace manufacturer, which has been grappling with production delays, strikes, and issues in its defense programs. Following the disclosure about Boeing’s fourth-quarter loss, stock declined 2.6% in after-hours trading.
Strikes and Delays Shake Production
The year 2024 proved challenging for Boeing as a strike involving more than 33,000 workers disrupted manufacturing lines for key aircraft, including the 737 MAX, 777, and 767 models. This prolonged halt compounded ongoing issues, such as a January incident involving a 737 MAX operated by Alaska Airlines that suffered a mid-air panel blowout, further complicating the company’s operations.
Despite these setbacks, Boeing took steps to stabilize its production. In early November, the company reached an agreement with Northwest factory workers, allowing the resumption of halted production lines. CEO Kelly Ortberg, who took charge in August, expressed optimism about the company’s efforts:
“Although we face near-term challenges, we took important steps to stabilize our business during the quarter, including reaching an agreement with our IAM-represented teammates and conducting a successful capital raise to improve our balance sheet. We also restarted 737, 767 and 777/777X production and our team remains focused on the hard work ahead to build a new future for Boeing.”
Financial Impact Across Divisions
Boeing’s financial challenges extend to both its commercial and defense operations, with substantial charges reported in key programs.
The Commercial Airplanes division of Boeing expects fourth-quarter revenue of $4.8 billion but forecasts an operating margin loss of 43.9%. The division is taking a $900 million pre-tax earnings charge on its 777X program due to higher labor costs resulting from the recent strike. Despite delays, Boeing has reaffirmed its commitment to delivering the first 777-9 aircraft in 2026, a timeline significantly later than originally planned when the aircraft was introduced in 2013, partly contributing to the Boeing’s fourth-quarter loss.
The company also anticipates an additional $200 million charge related to its 767 program.
The Defense, Space, and Security division expects $1.7 billion in pre-tax earnings charges across five major fixed-price development programs: the KC-46 tanker, T-7 trainer, Starliner capsule for NASA, the Air Force One aircraft, and the MQ-25 refueling drone.
The KC-46 program will absorb $800 million of this charge, with the T-7 trainer program accounting for $500 million. This division is expected to generate $5.4 billion in revenue for the quarter, with an operating margin loss nearing 42%.
Despite the financial difficulties, Boeing remains committed to its recovery and long-term goals. Boeing has resumed production of key aircraft and strengthened its financial position through a capital raise, aiming to overcome the fourth-quarter loss.
