Boeing Reports Q4 Loss, Cites Strike and Workforce Cuts
Boeing (BA) reported preliminary fourth-quarter results Thursday, revealing a significant operating cash flow loss of $3.5 billion. The loss was primarily attributed to the impact of the machinists' strike, workforce reductions, and adjustments to its defense business.
For the quarter, Boeing estimates revenue of $15.2 billion, falling short of Bloomberg's consensus estimates of $16.76 billion. The company expects a GAAP loss per share of $5.46, compared to a consensus estimate of $1.32. Additionally, Boeing will incur $1.7 billion in pre-tax charges within its defense and space division.
Boeing's stock declined 1% in after-hours trading.
"Despite near-term challenges, we have taken critical actions to stabilize our business," said Boeing President and CEO Kelly Ortberg. "We secured an agreement with our IAM-represented employees, raised capital to strengthen our balance sheet, and restarted production of key aircraft programs."
The IAM strike, which ended in November with a new four-year contract, will result in increased labor costs, leading to $1.1 billion in pre-tax charges for the 777X and 767 programs. Boeing subsequently increased IAM member salaries, improved benefits, and contributed to their retirement plans.
In December, Boeing laid off hundreds of workers in Washington and California, part of its previously announced 10% workforce reduction plan.
For the fourth quarter, Boeing delivered 57 aircraft, including 36 737 MAX jets, 15 787 Dreamliners, and six wide-body jets. Overall, Boeing delivered 348 commercial aircraft in 2022, a 33% decline year-over-year.
To bolster its cash reserves, Boeing launched a $19 billion share sale in November. As of the end of Q4, the company reported cash and marketable securities of $26.3 billion.