Boeing reported another loss of $3.86 billion in the fourth quarter of 2024, still feeling the effects of operations problems and a prolonged strike by its labor union. The company’s president and CEO, Kelly Ortberg, said it has progressed in addressing operations issues and rebuilding relations with customers and employees, suggesting that the worst may be behind it.
For instance, work stoppages negatively affected Boeing’s aircraft deliveries in 2024, which were more than one-third lower than 2023 levels and came to half the total of its European rival Airbus.
Revenue for Boeing was $15.2 billion for the quarter, down from $17.84 billion in the previous quarter and $22 billion for the fourth quarter of 2023. Losses continued to pile up, resulting in a cash burn of $3.45 billion.
Additional debt and equity have covered these losses, including $10 billion in corporate securities in May 2024 and $24.25 billion in newly issued shares in October 2024.
Wall Street doesn’t applaud companies returning to debt and equity markets to finance their operations. Issuing new shares leaves the company more leveraged, saddled with higher interest costs, and vulnerable to economic downturns. Offering new equity is dilutive to existing stockholders’ equity.
As a result, Boeing shares have been losing value on Wall Street, down by 14.75 percent over the past 12 months and 45.75 percent in the previous five years.
Wall Street is cozying up to Boeing’s shares again because the company pre-announced its fourth-quarter financial results, so traders and investors had plenty of time to react to any negative news.
Another reason is a comment from Ortberg indicating that the aircraft maker has progressed in addressing the problems that brought it to this challenging place.
“My team and I are focused on making the fundamental changes needed to fully recover our company’s performance and restore trust with our customers, employees, suppliers, investors, regulators, and all others who are counting on us.”
This comment follows a similar one Ortberg made in October 2024, when he called for “a fundamental culture change” to restore trust and predicted that it would take time for Boeing to return to its former reputation.
Meanwhile, the company has made some progress in turning things around. The 737 program resumed production in the quarter, and the plan is to gradually scale up the production rate.
“The 787 program exited the year at a production rate of five per month and recently announced plans to expand South Carolina operations,” the company stated. “In January, the 777X program resumed FAA certification flight testing, and the company still anticipates the first delivery of the 777-9 in 2026.”
In addition, its Commercial Airplanes division booked 204 net orders in the quarter, including 100 737-10 airplanes for Pegasus Airlines and 30 787-9 planes for FlyDubai. Airplane deliveries and backlog were up for the quarter.
At the same time, Boeing’s defense, space & security division received a contract from the U.S. Air Force for 15 KC-46A tankers, secured an order for seven P-8A Poseidon aircraft from the U.S. Navy, and delivered the final T-7A Red Hawk engineering and manufacturing development aircraft to the United States.
