Boeing Reports $3.8B Loss Amid Strikes and Production Delays.
Boeing reported a substantial loss of $3.8 billion (€3.4 billion) for the fourth quarter of 2024, continuing its struggles as ongoing issues, including a machinists' strike, took a toll on the aerospace giant. The company has faced over $35 billion (€32.2 billion) in losses since 2019 following the tragic crashes of two Boeing 737 Max jets, which resulted in the deaths of 346 people.
For the full year of 2024, Boeing's total loss stood at $11.8 billion (€10.86 billion), as the company dealt with mounting challenges, including labor disruptions, workforce reductions, and government contract difficulties.
As Boeing explained in their statement, “The fourth quarter was challenging, and the issues we faced during the year have had a lasting impact. We are committed to resolving the challenges that lie ahead, but this has been a difficult period for our company.”
Machinists’ Strike and Production Setbacks
A significant factor contributing to Boeing's losses was a machinists' strike at its facilities in Renton and Everett, Washington. The strike, which lasted over seven weeks, disrupted production on the 737 Max, 777, and 767 cargo planes. Boeing’s ability to deliver aircraft was severely hindered, which had a direct impact on the company's finances.
“Production setbacks, including the strike and the challenges with various government projects, affected our ability to meet delivery targets,” the company explained. The strike ended after Boeing agreed to implement pay raises and enhance benefits for the workers.
In addition to the $1.1 billion (€1.012 billion) in charges related to the 777 and 767 programs, Boeing also faced $1.7 billion (€1.564 billion) in charges tied to government contracts, including military refueling tankers and replacement jets for Air Force One.
Revenue and Jetliner Deliveries
Despite Boeing's efforts to recover, its fourth-quarter revenue fell short of analysts' expectations, totaling $15.2 billion (€13.944 billion), below the revised estimate of $15.7 billion (€14.44 billion). For the entire year, Boeing’s total revenue amounted to $66.5 billion (€61.08 billion).
Deliveries were another major hurdle for Boeing in 2024. The company delivered just 348 jetliners, more than a third less than the 528 delivered in 2023, and far behind rival Airbus. Deliveries are essential for generating significant cash flow for aircraft manufacturers, as they receive large payments from buyers when fulfilling orders. Over 75% of Boeing’s 2024 deliveries were the 737 Max jets, underlining the importance of its flagship aircraft to the company's business.
737 Max Production Limitations
Boeing also faced setbacks with the 737 Max when a door plug detached from the aircraft during takeoff in early January, leading to the Federal Aviation Administration (FAA) imposing a production limit on the model. This restriction remained in place until Boeing could assure federal regulators that it had addressed quality and safety concerns in its manufacturing process. The issue further tarnished Boeing's reputation and negatively impacted new aircraft sales, as the company did not receive any 737 Max orders for at least two months.
"While we were optimistic about increasing production, recent setbacks with the 737 Max production have slowed our momentum," Boeing noted. This setback contributed to Boeing finishing the year behind Airbus in terms of total net orders for commercial aircraft.
Despite these challenges, shares of Boeing Co. saw a slight increase, rising by less than 1% before the US market opened. Boeing is hopeful that 2025 will bring a return to growth, though it must first address its production limitations and ongoing reputation challenges.
With a clear focus on resolving the setbacks and regaining market confidence, Boeing is working to recover and turn the page on a difficult chapter. As they put it: “Our teams are focused on delivering for our customers, rebuilding our operations, and ensuring we emerge stronger from these challenging times.”
Boeing's Financial Highlights
- Significant Losses Post-2019: Since the tragic crashes of two 737 Max jets in 2019, Boeing has faced considerable financial setbacks. These crashes, which resulted in the loss of 346 lives, led to a grounding of the 737 Max fleet, halting production and causing massive delays. As a result, Boeing has faced losses exceeding $35 billion, impacting its financial standing.
- Fourth-Quarter Losses: For the fourth quarter of 2024, Boeing reported a loss of $3.8 billion (€3.4 billion), which was exacerbated by a machinists' strike, challenges with government contracts, and other operational issues. Boeing's loss per share was $5.46, significantly higher than Wall Street analysts' forecast of $3.08.
- Annual Loss: For the full year of 2024, Boeing reported a loss of $11.8 billion (€10.86 billion), marking another difficult year for the company.
- Revenue Shortfalls: Boeing's fourth-quarter revenue reached $15.2 billion (€13.944 billion), falling short of analysts’ revised estimate of $15.7 billion (€14.44 billion). Total annual revenue for 2024 amounted to $66.5 billion (€61.08 billion).
- Machinists' Strike Impact: A strike by machinists, who assemble the 737 Max and other aircraft, disrupted production, further contributing to the financial downturn. Boeing had to pay $1.1 billion (€1.012 billion) related to its 777 and 767 programs and another $1.7 billion (€1.564 billion) due to various government projects, such as the military refueling tanker and Air Force One replacement jets.
- Production Delays: Boeing's delivery numbers significantly dropped in 2024. The company delivered 348 jetliners, a sharp decline from 528 in 2023. Additionally, a production issue with a 737 Max jet caused the Federal Aviation Administration (FAA) to impose a production limit, which further delayed deliveries and affected the company's finances.
- Challenges with Safety and Quality: A production issue with the 737 Max, where a door plug detached from an aircraft shortly after takeoff, led to concerns over manufacturing safety and quality. As a result, Boeing's reputation took a hit, and it faced setbacks in new aircraft sales.
- Impact of Market Competition: Boeing faced significant competition from Airbus, which performed better in terms of deliveries and net orders for commercial aircraft. The company finished the year significantly behind Airbus in commercial aircraft orders.
