Boeing expects $4B loss in Q4 2024 due to strike and defense charges

Boeing has announced that it expects a $4 billion loss in the fourth quarter of 2024, due to a challenging year marked by a seven-week labor strike by US Coast factory workers and extra charges within the defense segment. 

In a statement released on January 23, 2025, Boeing announced that it will recognize impacts to its financial results “related to the IAM work stoppage, charges for certain Defense, Space & Security programs and costs associated with workforce reductions” when it reports its final fourth quarter results on January 28, 2025. 

The company expects fourth quarter revenue of $15.2 billion, a GAAP loss per share of $5.46, and operating cash flow of $3.5 billion. At the end of the quarter, cash and investments in marketable securities reached $26.3 billion.  

The total losses could reach around $4 billion when adding the pre-tax charges of $2.8 billion from the Commercial Airplanes and Defense divisions. 

According to Boeing, Commercial Airplanes results will show the effects of the International Association of Machinists and Aerospace Workers (IAM) strike, leading to “lower deliveries and pre-tax earnings charges of $1.1 billion on the 777X and 767 programs”. 

The 777X program will be landed with a pre-tax charge of $900 million due to increased labor costs from finalizing the IAM agreement, to be spread over the next few years. The company still expects to deliver the first 777-9 in 2026. For the fourth quarter, Commercial Airplanes anticipates revenue of $4.8 billion and an operating margin of negative 43.9%. 

“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,” said Kelly Ortberg, Boeing’s CEO. “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.” 

Defense, Space & Security anticipates pre-tax earnings charges totaling $1.7 billion for the KC-46 Pegasus, T-7A Red Hawk, Commercial Crew, VC-25 and MQ-25 programs. The KC-46A program will incur a pre-tax charge of $800 million due to increased manufacturing costs, which include effects from the IAM work stoppage.  

The T-7A program will sustain a pre-tax charge of $500 million, mainly because of higher estimated costs for production lots scheduled for 2026 and later. For the fourth quarter, Defense, Space & Security expects to report revenue of $5.4 billion and an operating margin of 41.9%. 

The planemaker concluded that the current financial results are “preliminary, unaudited and subject to completion, and may change as a result of management’s continued review”.  The post Boeing expects $4B loss in Q4 2024 due to strike and defense charges appeared first on AeroTime.

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