Boeing losses deepen on machinist strike, programme charges

23rd Oct 2024 13:38

(Sharecast News) - Boeing reported a significant widening of its losses in the third quarter on Wednesday, driven by a combination of work stoppages, higher costs, and programme charges.

The aerospace giant posted a net loss of $7.95bn, or $12.91 per share - starkly lower than the $2.2m or $3.64 per share it recorded in the same period last year.

Core losses per share came in at $10.44, widening from $3.26 a year ago.

Despite the negative figures, the results still narrowly topped analyst expectations, which forecast a loss of $10.52 per share.

Revenue for the quarter declined slightly to $17.8bn, down 1% from the prior year's $18.1bn, but met analysts' projections.

Boeing's performance was impacted by the International Association of Machinists (IAM) work stoppage and previously-announced charges related to both its commercial and defence programmes.

In particular, pre-tax charges of $3bn were recorded on the 777X and 767 programs in its commercial aeroplanes segment, which generated $7.4bn in revenue.

The defence, space and security segment also suffered, with a $2bn charge affecting results, pushing its operating margin to -43.1%.

Despite operational setbacks, Boeing said its backlog was still robust at $511bn, including orders for over 5,400 commercial aircraft.

However, cash flow remained a concern.

The company reported a free cash outflow of $2bn, while operating cash flow stood at a negative $1.3bn.

Boeing said it had since secured a new $10bn credit facility, increasing its available liquidity to $20bn.

Looking ahead, Boeing said it aimed to increase production rates, particularly for the 787 Dreamliner, reporting that it delivered 116 commercial aircraft in the quarter.

The company's global services segment meanwhile offered a brighter spot, with revenue of $4.9bn and a 17% operating margin, supported by new contracts, including agreements with All Nippon Airways and the US Air Force.

"It will take time to return Boeing to its former legacy, but with the right focus and culture, we can be an iconic company and aerospace leader once again," said president and chief executive officer Kelly Ortberg.

"Going forward, we will be focused on fundamentally changing the culture, stabilising the business, and improving program execution, while setting the foundation for the future of Boeing."

At 0841 EDT (1341 BST), shares in the Boeing Company were down 0.88% in premarket trading in New York, at $158.47.

Reporting by Josh White for Sharecast.com.