Boeing Co. (BA) Q3 2024 Financial Results

Boeing Co. (BA) reported its third-quarter financial results for 2024, showing a slight revenue decline and a core loss per share, primarily due to the ongoing strike by the International Association of Machinists (IAM). CEO Kelly Ortberg emphasized the need for significant changes within the company, focusing on cultural transformation, business stabilization, and enhanced execution on new platforms to secure a sustainable future for Boeing. Despite facing challenges such as eroded trust and high debt, Boeing maintains a strong backlog and a committed workforce. CFO Brian West noted total revenue of $17.8 billion and a core loss per share of $10.44, while outlining operational and financial recovery plans amidst production disruptions in the commercial airplane and defense sectors.

Key Takeaways

• Boeing reported a revenue decline to $17.8 billion and a core loss per share of $10.44.
• The IAM strike has disrupted production and deliveries.
• Boeing holds a backlog of approximately $0.5 trillion and delivered 116 aircraft this quarter.
• Boeing Defense & Space booked $8 billion in orders but faced operating margin challenges.
• Boeing Global Services saw a 2% increase in revenue with $6 billion in orders.
• A new $10 billion short-term credit facility was established to maintain an investment-grade credit rating.
• Negative free cash flow is expected for Q4 and 2025, with anticipated improvements as production stabilizes.

Company Outlook

• Long-term forecasts are under review, with expectations for free cash flow to improve in the second half of 2025.
• The focus remains on the core businesses of commercial airplanes and defense systems, alongside capital structure management.

Bearish Highlights

• The IAM strike has led to production and delivery delays, especially in the commercial sector.
• Boeing has 30 airplanes in inventory needing rework, with delays extending into 2024.
• The 777X program incurred a $2.6 billion pretax charge, delaying its first delivery to 2026.

Bullish Highlights

• Boeing Defense & Space secured a $2.6 billion award from the U.S. Air Force, and Global Services reported a 17% operating margin.

Misses

• Commercial airplanes faced delivery declines due to the IAM strike and ongoing program challenges.
• BDS reported a negative operating margin of -43.1% due to program difficulties.

Q&A Highlights

• Ortberg emphasized the need for improved collaboration on defense contracts and a shift towards profitability.
• Decisions regarding potential portfolio adjustments, including divestitures, are expected by year-end.
• Global Services showed modest growth, focusing on customer outcomes.

Boeing's Q3 earnings call highlighted its determination to navigate current challenges and lay the foundation for future stability and growth. With a clear strategy in place to enhance operational efficiency, Boeing aims to leverage its solid backlog and dedicated workforce to restore its legacy and achieve long-term success in the aerospace sector.

InvestingPro Insights

Boeing's financial results reflect its significant position in the aerospace industry despite ongoing challenges, indicating a market capitalization of $97.09 billion. Recent data indicates a revenue of $73.56 billion over the last twelve months, with a growth rate of -0.07%. The company faces financial pressures, underlined by a $509 million negative operating income due to the IAM strike and production issues.

Full Transcript Summary

Operator: Thank you for joining Boeing's Q3 2024 earnings call. Today’s discussion will include insights from CEO Kelly Ortberg and CFO Brian West.

Kelly Ortberg: Focused on cultural transformation, stability in business operations, and improving execution on new platforms. Plans include ending the IAM strike and enhancing collaboration within teams and with customers.

Brian West: Revenue down by 1%, with challenges in production reflecting impacts from the IAM work stoppage. We are working through operational recovery plans and addressing financial pressures.

Conclusion: Boeing is focused on regaining operational stability and re-establishing its leadership within the aerospace sector while managing its capital needs effectively. Case management and further financial strategy adjustments will be critical as the company navigates the current landscape.