Boeing (BA) Reports Q4 Prelims: $3.5B Operating Cash Flow Loss, Labor Costs Surge
Boeing (BA) has unveiled preliminary fourth quarter results, revealing a substantial $3.5 billion loss in operating cash flow. This setback is primarily attributed to the impact of the IAM work stoppage, workforce reductions, and adjustments in its defense business.
* Revenue: Boeing anticipates reporting $15.2 billion in revenue, falling short of consensus estimates of $16.76 billion per Bloomberg.
* GAAP Loss Per Share: Boeing estimates a GAAP loss per share of $5.46, significantly higher than the estimated $1.32 loss.
* Defense and Space Charges: The company expects to incur pre-tax charges of $1.7 billion in its defense and space business.
"We confronted near-term challenges but made significant strides to stabilize our business," said CEO Kelly Ortberg. "We secured a deal with IAM members, successfully raised capital to strengthen our balance sheet, and resumed production of key aircraft."
The IAM strike concluded in November, leading to a new four-year contract that entails increased labor costs. Boeing expects $1.1 billion in pre-tax charges for the 777X and 767 jet programs as a result. The strike resolution includes a 38% pay increase for IAM members over four years, additional bonuses, and enhanced benefits.
Boeing has also initiated workforce reductions, resulting in layoffs in Washington state and California. The company aims to decrease its headcount by 10%.
Despite these challenges, Boeing delivered 57 aircraft in the fourth quarter, including 737 MAX jets, 787 Dreamliners, and 767 and 777 aircraft. However, for the full year, deliveries declined by a third, totaling 348 commercial jets.
Boeing's cash position dwindled in November, prompting the announcement of a $19 billion share sale to bolster reserves. As of Q4 end, cash and marketable securities amounted to $26.3 billion.