10-QPeriod: Q3 FY2024

BOEING CO Quarterly Report for Q3 Ended Sep 30, 2024

Filed October 23, 2024For Securities:BABA-PA

Summary

Boeing Co. (BA) reported a net loss of $7.95 billion for the nine months ended September 30, 2024, a significant increase from a net loss of $2.20 billion in the same period last year. This deterioration in financial performance is primarily driven by substantial operating losses in the Commercial Airplanes segment, exacerbated by production slowdowns, quality control issues stemming from the January 2024 Alaska Airlines incident, and ongoing supply chain constraints. The recent work stoppage by the International Association of Machinists and Aerospace Workers (IAM 751) has further impacted production and deliveries, leading to significant cash outflows from operations. Despite these challenges, the company has secured substantial liquidity, including a $10 billion supplemental credit agreement and $10 billion in cash and short-term investments. Boeing is actively pursuing cost-saving measures, including workforce reductions. The planned acquisition of Spirit AeroSystems is progressing, although it is subject to regulatory and stockholder approvals, with an expected closing in mid-2025. Investors should closely monitor the resolution of the IAM 751 strike, progress on quality improvements, and the successful integration of Spirit AeroSystems, as these factors will be critical to Boeing's future financial performance and operational stability.

Financial Highlights

51 data points
Beta

Revenue

$17.84B

-19.7% Gross Margin

Net Income

-$6.17B

-34.6% Net Margin

EPS (Diluted)

$-9.97

Total Assets

$137.69B

Cash & Equivalents

$9.96B

Free Cash Flow

-$1.96B

Financial Statements
Beta
Revenue$17.84B
Cost of Revenue$21.35B
Gross Profit-$3.51B
R&D Expenses$1.15B
Operating Income-$5.76B
Net Income-$6.17B
EPS (Basic)$-9.97
EPS (Diluted)$-9.97
Shares Outstanding (Basic)618.60M
Shares Outstanding (Diluted)618.60M

Key Highlights

  • 1Significant increase in net loss to $7.95 billion for the nine months ended September 30, 2024, compared to $2.20 billion in the prior year period.
  • 2Commercial Airplanes segment reported a substantial operating loss of $5.88 billion for the nine months, significantly impacted by production slowdowns, quality issues, and supply chain constraints.
  • 3The IAM 751 work stoppage has led to a pause in production of key commercial aircraft models and is significantly impacting deliveries and cash flows.
  • 4Company secured $10 billion in liquidity through a new supplemental credit agreement, and maintains $10 billion in cash and short-term investments.
  • 5Planned acquisition of Spirit AeroSystems is progressing with an expected closing in mid-2025, contingent on regulatory and stockholder approvals.
  • 6Ongoing significant investment in research and development, particularly for the 777X program, contributing to increased expenses.
  • 7Concerns regarding credit ratings were highlighted, with Moody's downgrading ratings and both Moody's and S&P placing ratings on review for further downgrade.

Frequently Asked Questions

The primary reason for the increased net loss is the significant deterioration in the Commercial Airplanes segment's operating performance. This is due to a combination of factors including production slowdowns and pauses related to quality improvement actions following the Alaska Airlines incident, ongoing supply chain disruptions, and the impact of the IAM 751 work stoppage, all of which have reduced deliveries and increased costs.

Boeing has taken steps to bolster its liquidity. As of September 30, 2024, the company had $10.0 billion in cash and short-term investments. Furthermore, it entered into a $10.0 billion 364-day supplemental credit agreement on October 14, 2024, and maintains substantial unused borrowing capacity on its revolving credit lines. The company is also implementing cost-saving measures, including workforce reductions.

Boeing has an agreement to acquire Spirit AeroSystems in an all-stock transaction, valued at approximately $4.7 billion. The transaction is expected to close in mid-2025 and is subject to customary closing conditions, including regulatory and Spirit stockholder approvals. The acquisition aims to integrate Spirit's operations and potentially yield quality improvements, but faces risks related to integration challenges and potential delays in closing.

The work stoppage by IAM 751, which began on September 13, 2024, has significantly impacted Boeing by pausing production of key commercial aircraft models (737, 767, 777, 777X) and certain defense derivative aircraft. This has led to reduced aircraft deliveries and is adversely affecting the company's financial position, results of operations, and cash flows. Boeing anticipates negative operating cash flows until production and deliveries ramp up following the resolution of the strike.