Boeing Reports $4 Billion Loss in Fourth Quarter of 2024
Boeing, the renowned aircraft manufacturer, faced significant financial setbacks in the fourth quarter of 2024, with an estimated loss of approximately $4 billion. This loss adds to the company’s ongoing challenges, including a midair accident at the beginning of the year, a labor strike, and subsequent layoffs towards the end of 2024.
Financial Details and Projections
The company anticipates posting a loss of $5.46 per share for the fourth quarter, with revenue expected to be $15.2 billion, falling short of analysts’ projections. Boeing revealed that it likely consumed $3.5 billion in cash during the quarter, prompting the firm to raise over $20 billion to enhance liquidity amid these crises. Notably, Boeing has not reported an annual profit since 2018.
Impacts on Operations and Programs
Boeing expects to incur a $1.1 billion charge related to its 777X and 767 programs due to the recent strike and new contract agreements. Despite facing immediate challenges, Boeing’s CEO, Kelly Ortberg, highlighted the company’s efforts to stabilize its operations during the quarter, such as reaching agreements with union-represented employees and conducting a successful capital raise to bolster its financial position.
Operational Disruptions and Federal Scrutiny
The company’s struggles were exacerbated by a midair incident in January 2024, triggering renewed safety concerns following previous fatal crashes in 2018 and 2019. This incident led to increased federal oversight and a slowdown in new aircraft deliveries. Additionally, a machinists strike lasting nearly two months halted a significant portion of commercial aircraft production, with production resuming only after workers in the Puget Sound area secured a new contract in November.
Challenges Across Business Units
Boeing’s commercial airplane unit revenue is estimated to reach $4.8 billion, with an operating margin of approximately -44%, underlining the financial strain on this crucial segment. Furthermore, the company faces challenges in its defense unit, with expected pretax charges of $1.7 billion on the KC-46A tanker and delays in the production of the new Air Force One aircraft and its space programs.
As Boeing navigates these turbulent times, the company remains focused on addressing its financial losses, operational disruptions, and strategic challenges to ensure a path towards recovery and sustainability in the aerospace industry.
