Boeing Reports Q3 2024 Results Amid Labor Woes

‍DALLAS — Boeing has released its financial results for the third quarter of 2024, revealing revenue of US$17.8 billion. 

We see significant losses due to the impact of the International Association of Machinists and Aerospace Workers (IAM) 's ongoing 40-day strike and previously announced charges on commercial and defense programs.

Key financial metrics include a GAAP loss per share of US$9.97 and a core loss of US$10.44 (non-GAAP). The company also reported a negative operating cash flow of US$1.3 billion and a free cash flow of -US$2.0 billion. Despite these setbacks, Boeing's backlog remains strong at US$511 billion, with over 5,400 commercial airplanes on order.

Compared to the same period in 2023, Boeing’s revenue decreased by 1%, falling to US$17.8 billion. The company’s operational loss reached US$5.8 billion, a sharp contrast to last year’s loss of US$808 million. Boeing’s net loss surged to US$6.2 billion from US$1.6 billion the previous year, exacerbated by operating margins of -32.3%, reflecting continued challenges in the commercial and defense sectors.

Commercial Segment, Global Services

Boeing's Commercial Airplanes division saw third-quarter revenue of US$7.4 billion, down 5% from the previous year. Operating margins hit -54%, primarily driven by $3 billion in charges related to the 777X and 767 programs, the IAM work stoppage, and elevated research and development costs. 

The division delivered 116 airplanes in the quarter and booked 49 net orders. According to the report, the 787 program produces four airplanes per month and aims to increase that to five by year’s end.

The company’s Global Services division was a bright spot, with revenues increasing by 2% to US$4.9 billion and an improved operating margin of 17%. Substantial commercial volume contributed to these gains, and the division secured several key contracts, including agreements with ANA All Nippon Airways (NH) and the U.S. Air Force.

CEO Commentary

Boeing’s President and CEO, Kelly Ortberg, acknowledged the problematic quarter and emphasized the need for cultural change and business stabilization. "It will take time to return Boeing to its former legacy, but with the right focus and culture, we can be an iconic company and aerospace leader once again," Ortberg said.

In a candid message to employees, the CEO highlighted the following facts:

• The trust in our company has eroded.
• We’re saddled with too much debt.
• We’ve had serious lapses in our performance across the company which have disappointed many of our customers.

He then reminded staff of "great opportunities" ahead:

• Our company backlog is roughly half-a-trillion dollars.
• We have a customer base that want us and need us to succeed.
• We have employees who are thirsty to get back to the iconic company they know, setting the standards for the products that we deliver.

Significant hurdles remain as the American aerospace manufacturer contends with labor disruptions, program charges, and operational inefficiencies. Boeing's two main goals are to stabilize its operations and overcome ongoing challenges in its commercial and defense segments.

Do you think Boeing's substantial backlog and efforts to improve program execution can pave the way for recovery in future quarters? Be sure to leave your comments on our social media channels.