Boeing Shares Are Trading Lower Wednesday: What's Going On?

Boeing Inc BA shares are trading lower Wednesday following a disappointing third-quarter earnings report. Union members are expected to vote on a new proposed contract. Here's what you need to know.

What To Know: Boeing reported $17.85 billion in revenue, which was down 1% year-over-year and came in below the expected $17.93 billion. The company reported an adjusted loss of $10.44 per share, missing estimates for a loss of $10.34 per share, according to Benzinga Pro.

Boeing's adjusted operating loss ballooned to $5.99 billion, up from $1.09 billion a year ago. The core operating loss margin also grew significantly, reaching 33.6% compared to 6% a year ago. Additionally, commercial airplane deliveries were down 10%, while the Defense, Space & Security unit saw a 1% revenue increase and the Global Services division grew 2%.

Boeing said the drop in earnings was partly due to a work stoppage by the International Association of Machinists and Aerospace Workers (IAM), as well as charges on Boeing's commercial and defense programs. 

In a CNBC interview following the report, Boeing's CFO said cash burn will continue in 2025 but better free cash flow is expected next year compared to 2024. Free cash flow in the fourth quarter is expected to be similar to the second quarter. The Boeing CFO also mentioned plans to address the company’s balance sheet.

CEO Kelly Ortberg acknowledged Boeing's challenges, pointing to cultural problems, performance issues and high debt. He said the company needs time to stabilize and regain trust. Ortberg also emphasized focusing on fewer projects moving forward.

"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," he said.

On the labor front, more than 30,000 machinists went on strike in mid-September, halting production of the 737 MAX and other models, per Reuters.

A new contract proposal with a 35% wage increase over four years and a $7,000 ratification bonus is being voted on on Wednesday. If accepted, it could end the strike that has reportedly been costing Boeing roughly $100 million per day. The report indicates that the outcome remains uncertain, with workers split on whether to accept the offer.

Voting on the latest contract proposal is expected to close at 8 p.m. ET. A “simple 50%+1 majority” is needed to approve the new offer.

BA Price Action: Boeing shares were down 1.17% at $158.01 at the time of writing, according to Benzinga Pro.

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