Boeing Q3 Earnings: Revenue And Profit Decline, Cultural Challenges, CEO Ortberg Vows Transformation

Boeing Co BA reported a 1% year-over-year revenue decline to $17.854 billion in the third quarter of 2024, missing the consensus of $17.931 billion.

Adjusted loss per share expanded to $10.44 from $3.62 in the same quarter of 2023, missing the consensus of $10.34.

The company stated that the results reflect the impact of the International Association of Machinists and Aerospace Workers (IAM) work stoppage and previously announced charges on commercial and defense programs.

Boeing recorded an adjusted operating loss of $5.989 billion for the quarter, compared to $1.09 billion a year ago. The core operating loss margin was (33.6%) Vs. (6%) a year ago.

Commercial Airplanes revenue fell 5% YoY to $7.443 billion, impacted by $3 billion in charges and higher expenses.

Deliveries declined by 10%; 116 airplanes were delivered, and the backlog included over 5,400 airplanes valued at $428 billion.

Defense, Space & Security revenue rose 1% year over year to $5.536 billion. The backlog was $62 billion, of which 28% represents orders from customers outside the U.S.

Global Services revenue grew by 2% YoY to $4.910 billion. The operating margin expanded 70 bps to 17%, reflecting higher commercial volume and mix.

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Operating cash outflow for the third quarter totaled $1.35 billion, compared to cash provided of $22 million YoY; free cash outflow was $1.96 billion.

Debt was $57.7 billion, down from $57.9 billion at the beginning of the quarter. At the end of the quarter, cash and investments in marketable securities totaled $10.5 billion, and the total company backlog was $511 billion.

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Boeing 787 program is currently producing at 4 per month and maintains plans to return to 5 per month by year end. There were no 747 deliveries in 2024.

"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," commented Kelly Ortberg, Boeing President and Chief Executive Officer.

"Going forward, we will be focused on fundamentally changing the culture, stabilizing the business, and improving program execution, while setting the foundation for the future of Boeing," added Ortberg.

Ortberg acknowledged that the company is facing significant challenges, citing eroded trust, excessive debt, and performance lapses that have disappointed many customers.

Price Action: At the last check on Wednesday, BA shares were trading lower by 1.02% at $158.25 premarket.

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