Long strike costs Boeing billions

Boeing's management let the strike in production go on for 53 days until it granted 33,000 employees a 44 percent pay rise. Production is now up and running again; it is to be further increased and made safer and better, as Boeing CEO Kelly Ortberg said on Tuesday. This prompted investors to buy Boeing shares, which rose 1.5 percent.

However, the quarterly and annual figures presented by Ortberg are deep red. In the fourth quarter of 2024, the long production standstill had a particularly negative impact on earnings. Quarterly revenue fell by 31% to USD 15.2 billion compared to the fourth quarter of 2023. The operating profit of 283 million dollars a year ago has turned into a loss of 3.8 billion dollars. In other words, Boeing has had to deduct 25 cents from every dollar of revenue.

The operating cash flow has even plummeted from plus 3.4 billion to minus 3.5 billion dollars. The net quarterly loss has increased one hundred and twenty-ninefold, from 30 million to 3.9 billion dollars. According to the company, this rapid decline is due to the work stoppage, the agreement finally reached with the union, write-downs on loss-making military contracts and the costs of the wave of layoffs in the fall, in which Boeing laid off 17,000 employees.

Loss-making year 2024

Boeing's business figures for the full year 2024 are little better. Annual turnover fell by 14 percent to 66.5 billion dollars. The operating loss has increased almost fourteenfold to 10.7 billion dollars. The operating cash flow has turned from plus six billion to minus 12.1 billion dollars. And the net loss has more than quintupled (11.8 billion dollars).

Despite all this, Boeing had 26.3 billion dollars in cash at the end of the year, with 53.9 billion dollars in debt. This is because the company printed new shares and issued convertible bonds in the fall, which brought in around 21.1 billion dollars. In addition, Boeing still has an unused credit line of ten billion dollars.

Only one division is profitable

The commercial aviation division only delivered 348 aircraft in 2024, 180 aircraft or a third fewer than in 2023. Revenue also fell by a third. The division's operating loss, on the other hand, has increased almost fivefold to eight billion dollars.

The division for orders from the military, intelligence services and aerospace also reported a rising operating loss. Although annual turnover fell by only four percent to 23.9 billion dollars, the operating loss almost quintupled to 5.4 billion dollars. Only the Group's services division is profitable. Its annual turnover climbed by four percent to 20 billion dollars, while operating profit increased by nine percent to 3.6 billion dollars. Other income remained the same at 1.2 billion dollars, while annual debt service increased by eleven percent to 2.7 billion dollars.

The management does not venture a forecast. Due to the serious safety deficits in Boeing's 737 Max aircraft, the US Federal Aviation Authority (FAA) has limited production to 38 units per month. However, Boeing did not manage this in 2024 anyway. Ortberg would like to achieve this output in 2025 and then soften up the FAA so that Boeing can build more again in 2026. These prospects are likely to have boosted the share price on Tuesday.

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