Boeing’s Fourth-Quarter Results: A Mixed Bag
CEO Faces Investor Scrutiny Amidst Manufacturing Woes
Boeing’s fourth-quarter results, released on Tuesday, have left investors and analysts alike wondering about the company’s future trajectory. CEO Kelly Ortberg is under pressure to provide a clear roadmap for the company’s recovery, following a string of manufacturing problems and a sixth consecutive annual loss.
Disappointing Results
The company’s preliminary results, released last Thursday, showed a expected loss of $4 billion for the fourth quarter, with revenue of $15.2 billion, falling short of analysts’ expectations. The commercial aircraft unit and defense and space business were hit with charges, affecting aircraft production, including the Boeing 767, KC-46 tanker, and the delayed Air Force One planes.
A History of Challenges
Boeing’s struggles date back to 2018, when the company last reported a profit. Since then, it has faced a series of setbacks, including fatal crashes of its 737 Max planes, the pandemic’s impact on air travel, manufacturing defects, and cost overruns. The recent machinist strike, which lasted nearly two months, further exacerbated delivery delays to customers.
Resuming Production and Certification Efforts
After the strike ended, Boeing resumed production of its 737 Max aircraft in December and restarted test flights of its 777X aircraft earlier this month. The company is also working to certify the Max 7 and Max 10 aircraft, the smallest and largest models in the single-aisle Max family.
Airline CEOs Weigh In
While airline CEOs have largely supported Ortberg, key Boeing customers are still feeling the effects of the delivery delays. American Airlines has made further cuts to its schedule due to late deliveries of new Boeing 787 Dreamliners, while Ryanair’s CEO, Michael O’Leary, has expressed frustration over Boeing delivery delays, forcing the company to cut its passenger traffic goal for the year.
Investor Concerns
Ortberg and other Boeing leaders will likely face tough questions during the analyst call about cost overruns and delays in the company’s defense division, including the Air Force One aircraft, as well as potential tariffs and other policies of the new administration. With Boeing’s future hanging in the balance, investors will be watching closely for signs of a turnaround.
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