In a significant blow to its financial standing, Boeing announced on Thursday that it anticipates a fourth-quarter loss of approximately $4 billion, nearly three times the size expected by Wall Street analysts. This grim forecast has led to a sharp decline in the company's share price, with Boeing shares dropping 3.5% in after-hours trading. The announcement comes at the end of a tumultuous year for the aerospace giant, characterized by a production quality crisis, increased regulatory oversight, supply chain disruptions, and a labor strike by U.S. West Coast factory workers that severely impacted production. Boeing's expected quarterly loss equates to about $5.46 per share, starkly contrasting with the analysts' consensus of a $1.84 per share loss, according to LSEG data. This forecast reflects the direct financial impact of the year's events and signals deeper operational and strategic challenges for the company. The projected revenue for the quarter stands at $15.2 billion, falling short of the anticipated $16.27 billion, further illustrating the extent of the financial strain.
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The year started with a high-profile incident involving a mid-air panel blowout on a newly delivered Alaska Airlines 737 MAX, reigniting safety and quality concerns about Boeing's flagship aircraft. This event continued the issues that began with the two fatal 737 MAX crashes in 2018 and 2019, which had already put Boeing under intense scrutiny. The labor strike, which lasted seven weeks, was another significant hurdle. It disrupted operations at key manufacturing sites, affecting the production of the 737, 767, and 777 models. Boeing managed to settle the strike in November, but the aftermath included a $1.1 billion charge on its 777X and 767 programs due to the increased labor costs from the new contract.
In addition to these challenges, Boeing's defense, space, and security divisions also faced substantial issues. The company expects to record $1.7 billion in pre-tax charges across several programs, including the KC-46 tanker, T-7 trainer, MQ-25 refueling drone, the Air Force One replacement project, and the Starliner capsule for NASA. These charges reflect ongoing difficulties with fixed-price contracts and project delays, which have historically plagued Boeing's defense operations. Despite these setbacks, Boeing CEO Kelly Ortberg emphasized the company's efforts to stabilize its business. This included raising more than $20 billion in capital to bolster the balance sheet and reaching an agreement to end the labor strike. However, the road to recovery seems fraught with challenges, with the company anticipating a cash burn of $3.5 billion during the quarter.
Boeing's commercial airplane division, a major revenue driver, is expected to generate $4.8 billion in revenue for the quarter but with an operating margin loss of nearly 44%. The division delivered significantly fewer jets in 2024 compared to the previous year, with orders also seeing a sharp decline, though there were notable wins such as the deal with Turkey's Pegasus Airlines for 100 737 MAX aircraft. The broader implications of these financial warnings are yet to unfold. Analysts and investors are closely watching how Boeing will navigate these turbulent waters, with implications not only for its financial health but also for its position in the global aviation market. The company's ability to address quality issues, stabilize production, and manage its defense contracts will be crucial in determining its future trajectory in an industry where trust and reliability are paramount.