Boeing reported another loss of $3.86 billion in the fourth quarter, still feeling the effects of operations problems and a prolonged strike by its labor union. The company’s president and CEO, Kelly Ortberg, stated that it has progressed in addressing operations problems and rebuilding relations with customers and employees, suggesting the worst may be behind.
For instance, work stoppages negatively impacted Boeing’s aircraft deliveries in 2024, which were more than one-third lower than the 2023 levels and half as many as those of its European rival Airbus.
Revenue was $15.2 billion for the quarter, down from $17.84 billion in the previous quarter and $22 billion a year ago. 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 last May and $24.25 billion in October.
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. In contrast, offering new equity is dilutive to existing stockholders’ equity.
As a result, Boeing shares have been losing value on Wall Street, down 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 Boeing’s president, Kelly Ortberg, who indicated 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 legacy.
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 said. “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, its Defense, Space & Security division received an contract from the U.S. Air Force for 15 KC-46A Tankers, helping secure 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.
