Two 59%+ winners, four above 25% in Aug – How this AI model keeps picking winners
ARLINGTON, Va. - The Boeing Company (NYSE:BA) [NYSE: BA] is set to report a significant loss in its third-quarter financial results due to charges on several aerospace programs and a labor strike, according to a statement released today. The aerospace giant anticipates a third-quarter revenue of $17.8 billion, a GAAP loss per share of ($9.97), and an operating cash flow of ($1.3) billion. The company's cash and investments in marketable securities were stated to be $10.5 billion at the quarter's end.
Boeing President and CEO Kelly Ortberg commented on the challenges facing the company, emphasizing strategic decisions and structural changes aimed at ensuring long-term competitiveness. Ortberg also mentioned a focus on critical areas that will support future investments and the company's workforce.
The Commercial Airplanes division expects to recognize pre-tax earnings charges totaling $3.0 billion, with $2.6 billion attributed to the 777X program due to updated certification timelines and flight testing delays of the 777-9, as well as impacts from the International Association of Machinists (IAM) work stoppage. The first delivery of the 777-9 is now scheduled for 2026, and the 777-8 freighter for 2028. Additionally, Boeing plans to halt production of the 767 freighter, taking a $0.4 billion pre-tax charge and shifting focus to the 767-2C aircraft for the KC-46A Tanker program starting in 2027. The segment's expected third-quarter revenue is $7.4 billion with an operating margin of (54.0) percent.
The Defense, Space & Security segment is set to recognize pre-tax earnings charges of $2.0 billion across the T-7A, KC-46A, Commercial Crew, and MQ-25 programs. The T-7A program alone accounts for $0.9 billion of these charges, driven by increased estimated production costs for contracts extending into 2026 and beyond. The KC-46A program will take a $0.7 billion charge, reflecting the decision to end production of the 767 freighter and the effects of the IAM work stoppage. The segment anticipates a third-quarter revenue of $5.5 billion with an operating margin of (43.1) percent.
The company cautions that the preliminary financial estimates are unaudited and subject to completion, emphasizing that the figures could change upon final review. The press release also contains forward-looking statements that involve risks and uncertainties, indicating that actual results may differ from current estimates. Factors that could influence Boeing's performance include economic conditions, industry regulations, production rates, development and certification of new aircraft, government contracts, and various other risks outlined in the company's SEC filings.
This financial update is based on a press release statement from Boeing.
In other recent news, Boeing faces significant operational changes including a workforce reduction of approximately 10 percent and updates to key programs. The company has announced a delay in the delivery of the 777X program until 2026 and plans to cease production of the 767 Freighter after completing current orders. The Defense, Space & Security division is expected to incur losses this quarter due to underperformance on fixed-price development programs.
In addition, Boeing has been criticized by the Transportation Department's Office of Inspector General over its airplane production oversight. The report indicates that the Federal Aviation Administration (FAA) lacks an effective system to monitor Boeing's individual production facilities.
Recent developments also show Boeing facing financial and operational challenges. The company has reported a cash burn of $8.3 billion in the first half of the year and a significant increase in debt level to approximately $60 billion. The company's production has been affected by a strike initiated by its unionized workers, leading to a halt in the production of its 737 MAX aircraft.
Boeing is also under legal scrutiny, with a federal judge in Texas set to review objections to the company's plea agreement related to the 737 MAX crashes. The plea deal includes a guilty plea for conspiring to defraud regulators and a commitment to invest in safety and compliance improvements.
Lastly, the ongoing strike by 33,000 Boeing workers has been highlighted as a pressing issue by U.S. Transportation Secretary Pete Buttigieg, emphasizing the need for a resolution that benefits both the workers and the company.
InvestingPro Insights
Boeing's financial challenges, as outlined in the article, are further reflected in recent InvestingPro data and tips. The company's market capitalization stands at $92.7 billion, but its financial health raises concerns.
InvestingPro data shows that Boeing's revenue for the last twelve months as of Q2 2023 was $73.56 billion, with a revenue growth of -0.07%. This aligns with the company's projected third-quarter revenue of $17.8 billion mentioned in the article. The negative revenue growth trend is further emphasized by the quarterly revenue decline of -14.61% in Q2 2023.
An InvestingPro Tip highlights that Boeing "may have trouble making interest payments on debt," which is particularly relevant given the significant charges and losses reported across various programs. This financial strain is further evidenced by the company's negative operating income of -$509 million for the last twelve months.
Another crucial InvestingPro Tip notes that Boeing is "not profitable over the last twelve months," which is consistent with the expected GAAP loss per share of ($9.97) for the third quarter. The company's price-to-earnings ratio stands at -26.67, reflecting these profitability challenges.
It's worth noting that InvestingPro offers 11 additional tips for Boeing, providing a more comprehensive analysis of the company's financial situation. These insights could be valuable for investors seeking to understand the full impact of Boeing's current challenges and future prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.