Boeing Reports Preliminary Q4 Results, Estimates Operating Cash Flow Loss
Boeing (BA) released preliminary fourth-quarter results after market close on Thursday, projecting a significant $3.5 billion operating cash flow loss.
The loss stems from the impact of the IAM work stoppage, workforce reductions, and adjustments in the defense business. Boeing anticipates revenue of $15.2 billion, falling below the Bloomberg consensus of $16.76 billion. The GAAP loss per share is expected to be $5.46, higher than the estimated $1.32 loss.
Boeing will also incur pre-tax charges of $1.7 billion in its defense and space operations. After-hours trading saw Boeing shares decline by 1%.
"We're facing short-term challenges, but we've made progress in stabilizing during the quarter," stated Boeing President and CEO Kelly Ortberg. "We've reached an IAM agreement, secured additional capital, and resumed production on key models."
The IAM strike, which ended in November, will increase labor costs, leading to $1.1 billion in pre-tax charges for the 777X and 767 programs. Boeing enhanced IAM member compensation and benefits, including a 38% pay increase, a $12,000 bonus, and reduced healthcare premiums.
Boeing reduced its workforce by 10%, laid off workers in Washington and California, and delivered 57 aircraft in the fourth quarter, including 36 737 MAX jets and 15 787 Dreamliners. Annual commercial plane deliveries declined by a third to 348.
In November, Boeing's cash shortage threatened its credit rating, prompting a $19 billion share offering to strengthen reserves. The company had $26.3 billion in cash and marketable securities at the end of Q4.