Authors: Dan Catchpole, Allison Lampert and David Shepardson
SEATTLE (Reuters) – Boeing warned on Thursday it expects a fourth-quarter loss of about $4 billion at the end of a year marred by a manufacturing quality crisis, tighter regulatory scrutiny, supply chain delays and a crippling strike by factory workers on the U.S. West Coast.
The loss would be almost triple what Wall Street expects. Boeing (NYSE: ), which will report results next week, attributed the decline to charges in its defense and commercial units, lower jet deliveries and the effects of the strike.
The company forecast a quarterly loss of $5.46 per share, or roughly $4 billion, well above the average analyst expectation of a loss of $1.84 per share, according to LSEG data.
Boeing shares fell 3.5% in after-hours trading as the company projected quarterly revenue of $15.2 billion, missing expectations for $16.27 billion.
After posting record profits in the 2010s, Boeing has bled billions of dollars since 2019 after two fatal crashes of its best-selling 737 MAX jet revealed concerns about manufacturing quality and safety, and that the US planemaker misled regulators during the plane’s certification process .
The COVID-19 pandemic further squeezed the company, and 2024 began with a mid-air panel explosion on the nearly new 737 MAX, sending Boeing into yet another crisis.
During the first nine months of 2024, Boeing racked up nearly $8 billion in losses, caused by a strike by more than 33,000 workers that halted production of its 737 MAX, 777 and 767 planes and a struggling defense and aerospace division.
Based on Thursday’s forecast for quarterly results, the company’s annual loss this year could match 2020, when it lost nearly $12 billion, the most in its history.
‘SHORT-TERM CHALLENGES’
Boeing CEO Kelly Ortberg, who took over in August, said the company was facing “short-term challenges” but had taken important steps to stabilize operations during the fourth quarter.
Among them was reaching an agreement in November to end a seven-week strike that allowed it to restart production of the 737, 767 and 777 programs and raise more than $20 billion in capital, he said in a statement.
Boeing Commercial Airplanes expects revenue of $4.8 billion in the fourth quarter and an operating margin loss of 43.9%, the company said.
That includes roughly $900 million in pretax earnings for its 777X program, which the company said was due to higher labor costs from the new contract that resolved the strike. Boeing reiterated its plans to deliver the first 777-9 in 2026, several years later than expected when it launched the new plane in 2013.
It also projects costs of about $200 million for its 767 program.
Boeing’s commercial division delivered 348 jets last year, down from 528 the year before. New orders for jets in 2024 fell to less than half of what Boeing recorded a year earlier, although it had some wins such as reversing Turkey’s Pegasus Airlines, a longtime Airbus customer, with a firm order for 100 737 MAX planes.
Boeing Defense, Space and Security expects $1.7 billion in pretax earnings on its five fixed-price development programs: the KC-46 tanker, the T-7 trainer, its Starliner capsule for NASA’s Commercial Crew Program, two U.S. presidential aircraft known like Air Force One and the MQ-25 refueling drone.
The $800 million charge to the KC-46 tanker program, which is based on the 767 aircraft design, was partly due to the strike, according to the company.
Boeing said the T-7 Red Hawk trainer program will cost $500 million because of the U.S. Air Force’s Jan. 15 decision to delay the purchase of the first production model of its first new trainer in decades until fiscal year 2026.
Boeing’s defense division is expected to post quarterly revenue of $5.4 billion and an operating margin loss of nearly 42%, the company said.
