Boeing Co (BA, Financial) released its 8-K filing on October 23, 2024, detailing its third-quarter financial performance. The aerospace and defense giant reported a revenue of $17.8 billion, slightly below the analyst estimate of $17,930.65 million. The company posted a GAAP loss per share of ($9.97), which was greater than the estimated loss of ($9.90) per share, reflecting significant challenges faced during the quarter.
Company Overview
Boeing Co (BA, Financial) is a leading aerospace and defense firm operating in three segments: commercial airplanes; defense, space, and security; and global services. The company competes with Airbus in the commercial segment and with Lockheed and Northrop in defense, space, and security. Boeing's global services segment provides aftermarket support to airlines.
Performance and Challenges
The third-quarter results were heavily impacted by the International Association of Machinists and Aerospace Workers (IAM) work stoppage and previously announced charges on commercial and defense programs. These factors contributed to a GAAP loss from operations of $5.76 billion and a net loss of $6.17 billion. The operating cash flow was negative at ($1.3) billion, with a free cash flow of ($2.0) billion.
“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,” said Kelly Ortberg, Boeing President and Chief Executive Officer.
Financial Achievements and Industry Importance
Despite the challenges, Boeing's total company backlog remains robust at $511 billion, including over 5,400 commercial airplanes. This backlog is crucial for the company's long-term stability and growth in the aerospace and defense industry.
Segment Performance
In the Commercial Airplanes segment, Boeing reported a revenue of $7.4 billion, with a significant operating margin loss of (54.0) percent due to pre-tax charges on the 777X and 767 programs. The Defense, Space & Security segment saw a slight revenue increase to $5.5 billion, but also faced a substantial operating margin loss of (43.1) percent due to charges on various programs.
| Segment | Revenue (Q3 2024) | Operating Margin |
|---|---|---|
| Commercial Airplanes | $7.4 billion | (54.0)% |
| Defense, Space & Security | $5.5 billion | (43.1)% |
| Global Services | $4.9 billion | 17.0% |
Analysis and Outlook
Boeing's financial performance in the third quarter highlights the significant challenges the company faces in stabilizing its operations and improving program execution. The negative cash flow and increased losses underscore the need for strategic adjustments and cultural shifts within the organization. However, the substantial backlog and ongoing efforts to secure new contracts provide a foundation for potential recovery and growth in the future.
Explore the complete 8-K earnings release (here) from Boeing Co for further details.
