Boeing Projects $4 Billion Loss Amid Production Crisis and Strike Fallout

SEATTLE, Jan. 23 (Reuters) – Boeing announced on Thursday that it expects a fourth-quarter loss of approximately $4 billion, capping a tumultuous year marked by production quality issues, regulatory scrutiny, supply chain disruptions, and a debilitating strike by West Coast factory workers. The projected loss is nearly triple Wall Street‘s expectations, with the company attributing it to charges in its defense and commercial units, reduced jetliner deliveries, and the impact of the strike.

The aerospace giant forecast a quarterly loss of $5.46 per share, equating to roughly $4 billion, far exceeding analysts’ average estimate of a $1.84 per share loss, according to LSEG data. Boeing shares dropped 3.5% in after-hours trading as the company projected quarterly revenue of $15.2 billion, below the anticipated $16.27 billion.

Boeing’s struggles trace back to 2019, when two fatal crashes involving its 737 MAX jet exposed production quality and safety concerns, along with revelations that the company misled regulators during the plane’s certification process. The COVID-19 pandemic further strained the company, and 2024 began with a mid-air panel blowout on a nearly new 737 MAX, plunging Boeing into another crisis.

Through the first nine months of 2024, Boeing faced significant challenges, including a strike by more than 33,000 workers that halted production of its 737 MAX, 777, and 767 planes, as well as ongoing issues in its defense and space division. Based on Thursday’s forecast, the company’s annual loss for 2024 could rival its 2020 loss of nearly $12 billion, the largest in its history.

Boeing CEO Kelly Ortberg, who assumed leadership in August, acknowledged the company’s “near-term challenges” but highlighted steps taken to stabilize operations during the fourth quarter. These included reaching an agreement in November to end the strike, allowing production of the 737, 767, and 777 programs to resume, and raising over $20 billion in capital.

Boeing Commercial Airplanes expects fourth-quarter revenue of $4.8 billion and an operating margin loss of 43.9%, driven in part by a $900 million pre-tax earnings charge on its 777X program due to higher labor costs from the new contract. The company also anticipates a $200 million charge on its 767 program. Jet deliveries for 2024 fell to 528, down from the previous year, and new orders dropped by more than half, though Boeing secured a significant win with a firm order for 100 737 MAX planes from Turkey’s Pegasus Airlines.

Boeing’s defense division faces $1.7 billion in pre-tax earnings charges on five fixed-price development programs, including the KC-46 tanker, T-7 trainer, Starliner capsule, Air Force One, and MQ-25 refueling drone. The KC-46 program alone reported an $800 million charge, partly due to the strike, bringing total losses on the program to $8.928 billion. The T-7A program also saw a $500 million charge, raising its total losses to $3.194 billion.

Boeing’s defense division expects quarterly revenue of $5.4 billion and an operating margin loss of nearly 42%. The company will release its full earnings report on Jan. 28, providing further details on its financial performance and outlook.