Boeing Reports Q4 Loss, Anticipates Cash Flow Hit

Preliminary Results:

Boeing (BA) disclosed preliminary fourth-quarter outcomes after market close on Thursday, revealing a significant $3.5 billion operating cash flow loss. This loss stems from the impact of the International Association of Machinists (IAM) work stoppage, workforce reductions, and adjustments to the defense business.

For the quarter, Boeing forecasts $15.2 billion in revenue compared to the Bloomberg consensus estimate of $16.76 billion. The company projects a GAAP loss per share of $5.46, exceeding the estimated loss of $1.32. Boeing also anticipates $1.7 billion in pre-tax charges in its defense and space division.

Executive Commentary:

"Despite facing near-term challenges, we have made crucial progress in stabilizing our business this quarter," said Boeing President and CEO Kelly Ortberg. "We have secured an agreement with our IAM-represented employees, successfully raised capital to strengthen our balance sheet, and resumed production of key aircraft programs."

Labor and Workforce:

The IAM strike, which concluded in November with a new four-year contract, will incur higher labor costs. This has resulted in $1.1 billion in pre-tax charges for the 777X and 767 jet programs. Following the strike, Boeing increased IAM wages by 38% over four years, introduced a lump sum payment of $12,000, enhanced 401(k) contributions, and reduced health care premiums.

Boeing recently laid off hundreds of workers in Washington state and California, part of a planned 10% workforce reduction.

Production and Deliveries:

Boeing delivered 57 aircraft in the fourth quarter: 36 737 MAX jets, 15 787 Dreamliners, and six widebody jets. For the full year, Boeing delivered 348 commercial jets, a decline of approximately 33% from the previous year.

Financial Status:

Boeing's cash position has improved, with cash and marketable securities totaling $26.3 billion at the end of Q4. The company raised $19 billion through a share sale in November to boost cash reserves.

Upcoming Earnings Report:

Boeing will release full fourth-quarter and annual results on January 28th before market open.