Boeing’s Q4 Results: A Mixed Bag Amidst Challenges
Cash Flow Concerns
Aircraft giant Boeing (BA) released its preliminary fourth-quarter results on Thursday, revealing a staggering $3.5 billion operating cash flow loss. This significant setback is attributed to the International Association of Machinists (IAM) work stoppage, workforce reductions, and changes to its defense business.
Revenue and Loss Projections
For the quarter, Boeing anticipates revenue of $15.2 billion, falling short of the $16.76 billion consensus estimates. The company expects to report a GAAP loss per share of $5.46, exceeding the estimated loss of $1.32. Additionally, Boeing will take pre-tax charges of $1.7 billion in its defense and space business.
Workforce and Production Updates
The IAM strike, which concluded in November, will result in higher labor costs, leading to pre-tax charges of $1.1 billion for the 777X and 767 jet programs. Following the strike, Boeing increased IAM members’ pay by 38% over four years and implemented other benefits. However, the company also laid off hundreds of workers in Washington state and California as part of its 10% headcount reduction plan.
Production and Delivery Numbers
Boeing reported delivering 57 planes in the fourth quarter, including 36 737 MAX jets, 15 787 Dreamliners, and three 767 and three 777 jets. For the year, the company delivered 348 commercial jets, a 33% decrease compared to the previous year.
Cash Reserves and Investment
In November, Boeing’s dwindling cash position threatened its investment credit rating, prompting the company to launch a $19 billion share sale to boost cash reserves. As of the end of Q4, cash and investments in marketable securities stood at $26.3 billion.
CEO’s Outlook
Despite the challenges, Boeing President and CEO Kelly Ortberg remains optimistic. “Although we face near-term challenges, we took important steps to stabilize our business during the quarter… Our team remains focused on the hard work ahead to build a new future for Boeing.”
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