(Reuters) -Boeing on Tuesday reported an annual loss of $11.83 billion, its largest since 2020, as it grappled with problems at its commercial and defense units and the fallout from a crippling strike by U.S. West Coast factory workers.
The loss demonstrates the challenges facing CEO Kelly Ortberg in turning around the planemaker as it cedes more ground to rival Airbus in the delivery race and comes under the crosshairs of regulators and customers following a series of missteps.
Shares of Boeing fell marginally in trading before the bell on Tuesday.
Ortberg, who took the reins of the planemaker in August, however, said the company was making progress on restoring stability to its struggling production lines after a harrowing mid-air accident in 2024 raised concerns about the safety of its jets.
The company reported a loss of $3.86 billion in the fourth quarter due to what Ortberg called “disappointing” charges in several fixed-price defense programs. He, however, added Boeing was “now more proactive and clear-eyed on the risks” to the programs.
Revenue for the quarter through December fell 31% to $15.24 billion, missing analysts’ expectation of $16.21 billion, according to data compiled by LSEG.
Quarterly adjusted loss per share was $5.9, compared with expectations of a loss of $3 per share.
Cash burn was $14.3 billion in 2024, compared with a cash flow of $4.43 billion in 2023.
Ortberg reiterated the company’s four-part plan to turn the business around including undertaking a “multi-year journey” to fix Boeing’s culture, “perhaps the most important change we need to make.”
After banking record-high profits in the 2010s, Boeing has bled more than $30 billion since 2019 after two fatal crashes of its best-selling 737 MAX jet triggered production quality and safety concerns and worries that it had misled regulators during the plane’s certification process.
The COVID-19 pandemic further squeezed the company, while the mid-air panel blowout on a nearly new 737 MAX in early 2024 dragged Boeing into another crisis.
“We have completed deep dives on all of our challenging fixed-price development programs,” Ortberg said on Tuesday in a letter to employees.
The company’s Defense, Space & Security business lost $5.41 billion in 2024.
Ortberg added Boeing has made progress with its supply chain and has returned to an output rate of five 787 jets per month at the end of 2024, despite delays in areas like seats.
Boeing’s commercial planes division, now focused on getting three of its models certified, has a good handle on fixing a thrust link issue uncovered on its 777X widebody, which resumed flight tests earlier this month, he added.
Ortberg was guarded in his message about the status of solving problems with anti-icing systems on the 737-7 and -10 models. The company is “still working through the testing phase focusing on finalization of the anti-icing design solution,” he said.
The company continues to invest in “core businesses while streamlining our portfolio in areas that are not core to our future,” he said.
(Reporting By Abhijith Ganapavaram in Bengaluru, Allison Lampert in Montreal and Dan Catchpole in Seattle; Editing by Anil D’Silva)
Comments