Boeing Facing Largest Annual Loss of $11.8B Since 2020

Boeing reported that its revenue for the previous year fell 14% yearly to $66.5 billion.

Boeing is one of the largest global aerospace manufacturers. It designs, manufactures, and sells aeroplanes, rotorcraft, rockets, satellites, and missiles worldwide. It recently posted an annual loss of $11.8 billion, the largest since 2020, and its sixth consecutive annual deficit due to lower commercial jet deliveries, issues at its defence unit, and a strike by US West Coast production workers.

The business previously suffered a $2.2 billion loss in 2023. On Tuesday, Boeing reported that its revenue for the previous year fell 14% yearly to $66.5 billion.

Boeing’s fourth-quarter loss was $3.8 billion, as its revenue for the three months ending in December dropped 31% yearly to $15.2 billion.

The company reported a quarterly cash burn, which is the rate at which the company spends money, taking into account the company’s positive cash flow or revenue of $4.1 billion, a metric closely watched by investors, slightly lower than what the analysts expected which is $4.26 billion cash burn, according to data made by London Stock Exchange Group (LSEG).

Kelly Ortberg, Boeing’s president, and CEO, claimed that throughout the quarter, they tried to progress in crucial areas to stabilise their operations and strengthen significant aspects of their safety and quality plan.

He added that they were making all the efforts to improve the business and again gain the confidence of its shareholders. They are implementing significant adjustments in their operations to recover their company’s performance and rebuild the trust of their customers, employees, suppliers, investors, regulators, and everyone else who depends on them.

The findings undertaken on the firm highlight that it will be challenging for Mr. Ortberg and his team to turn the company around since it has fallen well behind its European competitor Airbus angered airline passengers, and drawn regulatory attention due to its safety and quality issues, especially after when a Boeing aircraft operated by United Airlines suddenly plunged in mid-air with nearly 40 people were injured, with six seriously injured, forcing the fight to make an emergency landing. Boeing has been under high scrutiny by the US Federal Aviation Administration and has had low production for that flight model after that incident.

Boeing has been facing a rough patch during 2024, especially with lengthy employee strikes, safety issues with some of its commercial flights, overspending defense contracts, and changes to its senior management.

The company stated that financials show the effects of the International Association of Machinists and Aerospace Workers (IAM) work stoppage and agreement, fees for some defense programs, and expenses related to last year’s staff reduction.  

Boeing’s commercial planes unit showed a fourth-quarter revenue of nearly $4.8 billion, a 555 decline from last year. It was the effect of the strike and subsequent agreement, which said lower deliveries and pre-tax charges of $1.1 billion on the 777X and 767 programs.

The commercial plan unit has booked 204 net orders, which includes 30 of the 787-9 aircraft for flydubai and 100 of the 737-10 aircraft for Turkish low-cost carrier Pegasus Airlines.

It delivered 57 flights over the three months, compared to 157 in the fourth quarter of 2023, and over 5500 plans valued at $435 billion are in its backlog.

It delivered 348 commercial plans last year. On the other hand, it delivered 528 in 2023.

Meanwhile, its competitor, Airbus, delivered 766 commercial flights to 86 customers in 2024 and registered 878 gross new orders. As a result, Airbus has 8,658 aircraft in its 2024 year-end backlog.

Boeing reported that it had pre-tax charges worth $1.7 billion on the KC-46A, T-7A, commercial crew, VC-25B, and MQ-25 programs, while its revenue from defense, space, and security business reduced 20% yearly to $5.4 billion during the fourth quarter.