Boeing warns of $5.4 billion quarterly loss, nearly triple market expectations

SEATTLE – Boeing warned on Jan 23 that it was expecting a fourth-quarter 2024 loss of about US$4 billion (S$5.4 billion) to close a year marred by a production quality crisis, stricter regulatory scrutiny, supply chain delays and a crippling strike by US West Coast factory workers.

The loss would be nearly triple the size expected by Wall Street. Boeing, which will release its results next week, attributed it to charges at its defence and commercial units, lower jetliner deliveries and the strike’s effects.

The company forecast a quarterly loss of US$5.46 per share, which equates to about US$4 billion, sharply steeper than analysts’ average expectation of a US$1.84 per share loss, according to LSEG data.

Boeing shares fell 3.5 per cent in after-hours trading on Jan 23 as the company projected quarterly revenue of US$15.2 billion, below expectations of US$16.27 billion.

After banking record-high profits in the 2010s, Boeing has bled billions of dollars since 2019 after two fatal crashes of its best-selling 737 Max jet revealed production quality and safety concerns and that the US planemaker had misled regulators during the plane’s certification process.

The Covid-19 pandemic further squeezed the company, and 2024 began with a mid-air panel blowout on a nearly new 737 Max, sending Boeing into another crisis.

Through the first nine months of 2024, Boeing racked up nearly US$8 billion in losses, hammered by a strike by more than 33,000 workers that halted production of its 737 Max, 777 and 767 planes and by an ailing defence and space division.

Based on the Jan 23 quarterly results forecast, the company’s annual loss for 2025 could rival 2020, when it lost nearly US$12 billion, the most in its history.

Boeing chief executive Kelly Ortberg, who took the reins in August 2024, said the company faced “near-term challenges” but had taken important steps to stabilise its business during the fourth quarter. These included reaching an agreement in November 2024 to end the seven-week strike and raising more than US$20 billion in capital, he added.

Boeing Commercial Airplanes expects fourth-quarter revenue of US$4.8 billion and an operating margin loss of 43.9 per cent, the company said.

Boeing reiterated its plans to deliver the first 777-9 in 2026, several years later than anticipated when it launched the new airplane in 2013.

Boeing’s commercial division delivered 348 jets in 2024, down from 528 the previous year.

New orders for jets in 2024 dropped to less than half as many as Boeing recorded one year earlier, though it had some wins such as flipping Turkey’s Pegasus Airlines, a long-time Airbus customer, with a firm order for 100 737 Max planes. REUTERS