By Scott Hamilton
Jan. 23, 2025, © Leeham News: The Boeing Co. nearly ran out of cash in the fourth quarter, the company said today as it previewed earnings that will be announced next week.
Boeing’s fourth-quarter cash flow was negative at $3.5bn, in part due to a strike that overlapped the third and fourth quarters.
Fourth quarter revenue will only be $15.2bn, reflecting the 53-day strike by its largest union, the IAM 751 in Washington and Oregon. The strike began on September 13. A new contract was approved on October 31. Employees returned to work by November 12, but retraining and the Christmas-New Year holidays delayed returning to full production.
Boeing said it lost $5.46 per share, or nearly $3.4bn, in the quarter. The company raised $25bn in cash and securities in the quarter. It entered the fourth quarter with $10bn in cash and short-term investments. It had $26.3bn at year-end. These figures illustrate how precarious Boeing’s position had become during the fourth quarter.
$1.1bn in new charges
Boeing took a $900m charge against the 777X and 767 programs. Of this, $900m “reflects higher estimated labor costs associated with finalizing the IAM agreement and will be incurred over the next several years,” Boeing said. “The company still anticipates the first delivery of the 777-9 in 2026. Commercial Airplanes expects to report fourth-quarter revenue of $4.8 billion and operating margin of (43.9)%.”
The Defense, Space & Security unit will have pre-tax earnings charges of $1.7bn on the KC-46A, T-7A, Commercial Crew (Starliner), VC-25B (Air Force One), and MQ-25 programs. “The KC-46A program pre-tax charge of $0.8bn reflects higher estimated manufacturing costs, including impacts of the IAM work stoppage and agreement,” Boeing said in today’s statement. “The T-7A program pre-tax charge of $0.5bn was primarily driven by higher estimated costs on production lots in 2026 and beyond. Defense, Space & Security expects to report fourth-quarter revenue of $5.4 billion and operating margin of (41.9)%.”
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