Boeing (BA) Q3 2024 earnings

BoeingKelly Ortberg, the new CEO of , said the company needs to become leaner and improve quality, a vision he laid out for the struggling aircraft maker ahead of its first quarterly call with analysts on Wednesday. At the same time, thousands of striking Boeing machinists will vote on a new labor contract, and Ortberg said he hopes for an agreement.

Boeing reported a third-quarter loss of more than $6 billion, its biggest since 2020, as the pandemic halted demand for most planes and its best-selling plane was grounded after two crashes.

Boeing reported preliminary third-quarter results earlier this month that showed revenue of $17.8 billion, down less than 2% from a year ago, and an operating loss of $9.97 per share Cash outflow of $1.3 billion. The company disclosed charges of more than $5 billion across its commercial and defense units and said it ended the third quarter with $10.5 billion in cash and marketable securities.

The commercial aircraft division's losses rose to more than $4 billion from a loss of $678 million a year earlier. The charges were related to the additional delay of the debut of its 777X widebody aircraft until 2026 and another delay related to the 767. Boeing plans to stop production of the 767 when orders are filled in 2027.

Its defense unit lost $2.4 billion in the third quarter, compared with $924 million in the same period in 2023, with the charges tied to several programs including the KC-46 tanker and the troubled Starliner. The Starliner capsule returned empty from the International Space Station this summer, without the two NASA astronauts it originally carried into space.

Here's what the company reported compared to the expectations of Wall Street analysts surveyed by LSEG, formerly known as Refinitiv:

• Loss per share: $10.44 adjusted. That may not compare to LSEG's expected adjusted loss of $10.52.
• Revenue: $17.84 billion versus $17.82 billion expected

Ortberg, a former Rockwell Collins CEO, took the helm of Boeing in August with the task of restoring the company's reputation and fixing quality problems on planes and other programs. In January, a door plug on an Alaska Airlines 737 Max 9 flight burst minutes later after the key bolts were not reinstalled before the plane left the Boeing factory. The near-disaster sparked renewed safety concerns among regulators and customers.

“We need to know what’s going on, not just with our products, but also with our employees,” Ortberg said Wednesday. “And most importantly, we prevent problems from festering and work better together to identify, address and understand the root cause.”

Ortberg acknowledged that it will take time to turn the ship around.

“We have employees who are striving to return to the legendary company they know that sets the standard for the products we deliver,” he said.

Ortberg said earlier this month that Boeing would cut 10% of its global workforce of about 170,000 employees, indicating a leaner manufacturer. He is expected to face questions on the call about which units or projects the company will consider separating.

“We must reset priorities and create a leaner, more focused organization,” he said in his prepared remarks.

The most pressing issue for Boeing this week is ending a costly labor strike that has crippled its factories in the Seattle area, where most of its planes are made. More than 32,000 machinists quit their jobs in early September, about two weeks before the end of the quarter, after they overwhelmingly voted against a contract that included a 25% pay increase. A new proposal unveiled Saturday included 35% raises over four years, a larger signing bonus and 401(k) contributions, among other improvements.

According to S&P Global Ratings, the strike is costing Boeing $1 billion a month and a quick conclusion is critical for the fragile aerospace supply chain, which is already experiencing furloughs.

“We worked feverishly to find a solution that worked for the company and met the needs of our employees,” Ortberg said.

The deal includes a commitment from Boeing to build its next plane in the Pacific Northwest. That was a sore point for union machinists after Boeing moved its 787 Dreamliner production to a non-union plant in South Carolina.

“Boeing is an aircraft company and at the right time in the future we need to develop a new aircraft. But until then we still have a lot of work to do,” said Ortberg on Wednesday.

Analysts are optimistic that the deal will go through. The results of the labor vote are expected late Wednesday evening.