Boeing Co (BA) experienced a turbulent third quarter of 2024, reporting a 1% year-over-year revenue decline to $17.854 billion, falling short of the anticipated $17.931 billion consensus. The adjusted loss per share also expanded to $10.44, up from $3.62 in the same quarter of 2023, missing the consensus estimate of $10.34.
The company attributed these disappointing results to the ongoing work stoppage by the International Association of Machinists and Aerospace Workers (IAM) and previously announced charges related to both commercial and defense programs. This resulted in a significant adjusted operating loss of $5.989 billion for the quarter, compared to $1.09 billion a year ago, with a core operating loss margin reaching (33.6%) versus (6%) a year ago.
Commercial Airplanes revenue took a hit, falling 5% year-over-year to $7.443 billion. This decline was attributed to $3 billion in charges and increased expenses. Deliveries also saw a 10% decrease, with 116 airplanes delivered. Despite this, the backlog remains substantial, boasting over 5,400 airplanes valued at $428 billion.
On a more positive note, Defense, Space & Security revenue rose 1% year-over-year to $5.536 billion. The backlog for this segment stood at $62 billion, with 28% representing orders from international customers. Global Services revenue also saw growth, rising 2% year-over-year to $4.910 billion. This segment saw an expanded operating margin of 17%, boosted by higher commercial volume and favorable mix.
The company’s financial health continues to be a concern, with operating cash outflow for the third quarter reaching $1.35 billion, a stark contrast to the $22 million in cash provided during the same period last year. Free cash outflow also reached $1.96 billion. While debt decreased slightly from $57.9 billion at the beginning of the quarter to $57.7 billion, cash and investments in marketable securities totaled $10.5 billion at the end of the quarter. The company’s total backlog remains robust at $511 billion.
Boeing’s 787 program is currently producing at a rate of 4 planes per month and plans to increase production to 5 per month by the end of the year. However, no 747 deliveries were recorded in 2024.
Despite the challenges, Boeing CEO Kelly Ortberg expressed optimism, emphasizing the company’s commitment to cultural change, business stabilization, and improved program execution. He acknowledged the need to restore trust and address performance lapses that have disappointed customers. Boeing faces significant challenges including eroded trust, excessive debt, and performance lapses that have disappointed many customers.
BA shares were trading down 1.02% at $158.25 premarket on Wednesday.