Boeing Q4 Earnings Preview: Operating Cash Flow Loss Due to IAM Strike

Key Highlights:

* Q4 preliminary results show a $3.5 billion operating cash flow loss
* Loss attributed to the IAM work stoppage, workforce reductions, and defense business changes
* Revenue of $15.2 billion, below consensus estimates of $16.76 billion
* GAAP loss per share of $5.46, wider than estimated loss of $1.32
* Pre-tax charges of $1.7 billion in defense and space business
* Boeing shares down 1% in after-hours trading

Quote from Boeing CEO:

"We face near-term challenges, but we've stabilized our business, reached an agreement with IAM, and raised capital to improve our balance sheet."

Key Impacts of IAM Strike:

* Higher labor costs leading to pre-tax charges of $1.1 billion for 777X and 767 programs
* Pay increase of 38% for IAM members over four years
* Merger of $7,000 ratification bonus and $5,000 lump sum payment into 401(k) plans or cash payout
* Increased 401(K) match and lowered health care premiums

Operational Updates:

* Hundreds of job cuts in Washington state and California
* 57 planes delivered in Q4, including 36 737 MAX and 15 787 Dreamliners
* Total commercial jet deliveries of 348 for the year, down 33% year-over-year

Financial Position:

* Cash and marketable securities at $26.3 billion at end of Q4
* $19 billion share sale announced in November to boost cash reserves