Boeing (BA) 3Q 2024 earnings

Boeing‘s latest CEO, Kelly Ortberg, said the corporate is reviewing its various businesses, laying out a vision for a leaner future on the troubled airplane manufacturer in his first quarterly call with analysts on Wednesday. At the identical time, hundreds of striking Boeing machinists will vote on a latest labor contract, and Ortberg said he was longing for a deal.

“We’re going through a portfolio process straight away to take a look at the general portfolio and seeing what do we would like to seem like five years from now. Which will include streamlining certain things,” Ortberg said in an interview with CNBC’s Squawk on the Street” on Wednesday. He added that no decisions have been made yet. “I feel our core business of economic aircraft and core defense products will all the time stick with the Boeing Co.”

“I might quite err on the side of doing less and higher than doing more and never doing it well, and I feel there are some cases where we will do less and do higher,” he said.

Boeing reported a greater than $6 billion loss for the third quarter, its largest since 2020 when the pandemic halted most aircraft demand and its bestselling airplane was grounded after two crashes.

CFO Brian West said the corporate will likely proceed to burn money this and next 12 months, pointing to a probable improvement within the second half of 2025. Boeing had originally planned to be cash-flow positive this 12 months. Boeing shares slid through the call, and ended the day down lower than 2%.

Boeing had released preliminary third-quarter results earlier this month, showing revenue of $17.8 billion, down lower than 2% from a 12 months earlier, in addition to a lack of $9.97 a share and an operating money outflow of $1.3 billion. It disclosed charges of greater than $5 billion across its industrial and defense units and said it ended the third quarter with $10.5 billion in money and marketable securities.

Its industrial airplane unit’s losses swelled to greater than $4 billion from a $678 million loss a 12 months before. The fees were related to the extra delay of the debut of its 777X wide-body aircraft to 2026 and one other delay tied to the 767. Boeing plans to finish production of the 767 when orders are fulfilled in 2027.

Its defense unit lost $2.4 billion within the third quarter compared with a lack of $924 million in the identical period of 2023, with charges tied to several programs, including the KC-46 tanker and the troubled Starliner. The Starliner capsule returned empty from the International Space Station this summer, without the 2 NASA astronauts it originally carried to space.

Ortberg announced the departure of the defense unit’s CEO, Ted Colbert, in September.

When asked by CNBC in regards to the Starliner problem, Ortberg said, “My gut response is that we have to enhance our systems engineering and our design capabilities in order that never happens again.”

Here’s what the corporate reported versus what Wall Street analysts surveyed by LSEG expected:

• Loss per share: $10.44 adjusted compared with an adjusted lack of $10.52
• Revenue: $17.84 billion vs $17.82 billion expected

Ortberg, a former CEO of Rockwell Collins, took the helm of Boeing in August, tasked with restoring the corporate’s fame and stamping out quality problems on aircraft and in other programs. In January, a door plug blew out minutes into an Alaska Airlines flight on a 737 Max 9 after key bolts weren’t reinstalled before the plane left Boeing’s factory. The near-catastrophe reignited safety concerns from regulators and customers.

“We want to know what is going on on, not only with our products, but with our people,” Ortberg said in prepared remarks Wednesday before the earnings call. “And most significantly, we’d like to stop the festering of issues and work higher together to discover, fix, and understand root cause.”

Ortberg acknowledged that it should take a while to show the ship but was upbeat the corporate could increase output of its bestselling 737 Max once the strike ends.

“We have now employees who’re thirsty to get back to the enduring company they know, setting the standards for the products that we deliver,” he said.

Ortberg earlier this month said Boeing will slash 10% of its global workforce of about 170,000 people, hinting at a slimmer manufacturer. He is anticipated to face questions on the decision about which units or projects the corporate will consider shedding.

“We want to reset priorities and create a leaner, more focused organization,” he said in his prepared remarks.

Essentially the most pressing issue for Boeing this week is ending a costly labor strike that has hobbled its factories within the Seattle area, where most of its aircraft are produced. Greater than 32,000 machinists walked off the job early Sept. 13, about two weeks before the quarter ended, after overwhelmingly voting down a contract that included 25% raises, amongst other changes. A latest proposal, unveiled Saturday, included 35% raises over 4 years, the next signing bonus and 401(k) contributions, and other improvements.