- Financials reflect impacts of the International Association of Machinists and Aerospace Workers (IAM) work stoppage and previously announced charges on commercial and defense programs
- Revenue of $17.8 billion, GAAP loss per share of ($9.97) and core (non-GAAP)* loss per share of ($10.44)
- Operating cash flow of ($1.3) billion and free cash flow of ($2.0) billion (non-GAAP)*
- Total company backlog of $511 billion, including over 5,400 commercial airplanes
|
Table 1. Summary Financial
Results |
Third Quarter |
Nine Months |
|||||||||||||||||||||||||||||||||||||
|
(Dollars in Millions, except
per share data) |
2024 |
2023 |
Change |
2024 |
2023 |
Change |
|||||||||||||||||||||||||||||||||
|
Revenues |
$17,840 |
$18,104 |
(1) % |
$51,275 |
$55,776 |
(8) % |
|||||||||||||||||||||||||||||||||
|
GAAP |
|||||||||||||||||||||||||||||||||||||||
|
Loss from operations |
($5,761) |
($808) |
NM |
($6,937) |
($1,056) |
NM |
|||||||||||||||||||||||||||||||||
|
Operating margins |
(32.3) |
% |
(4.5) |
% |
NM |
(13.5) |
% |
(1.9) |
% |
NM |
|||||||||||||||||||||||||||||
|
Net loss |
($6,174) |
($1,638) |
NM |
($7,968) |
($2,212) |
NM |
|||||||||||||||||||||||||||||||||
|
Basic loss per share |
($9.97) |
($2.70) |
NM |
($12.91) |
($3.64) |
NM |
|||||||||||||||||||||||||||||||||
|
Operating cash flow |
($1,345) |
$22 |
NM |
($8,630) |
$2,579 |
NM |
|||||||||||||||||||||||||||||||||
|
Non-GAAP* |
|||||||||||||||||||||||||||||||||||||||
|
Core operating loss |
($5,989) |
($1,089) |
NM |
($7,769) |
($1,919) |
NM |
|||||||||||||||||||||||||||||||||
|
Core operating margins |
(33.6) |
% |
(6.0) |
% |
NM |
(15.2) |
% |
(3.4) |
% |
NM |
|||||||||||||||||||||||||||||
|
Core loss per share |
($10.44) |
($3.26) |
NM |
($14.52) |
($5.35) |
NM |
|||||||||||||||||||||||||||||||||
|
*Non-GAAP measure;
complete definitions of Boeing's non-GAAP measures are on page 5,
"Non-GAAP Measures Disclosures." |
|||||||||||||||||||||||||||||||||||||||
The Boeing Company [NYSE: BA] recorded third quarter revenue of $17.8 billion, GAAP loss per share of ($9.97) and core loss per share (non-GAAP)* of ($10.44) (Table 1) primarily reflecting impacts of the IAM work stoppage and previously announced charges on commercial and defense programs. Boeing reported operating cash flow of ($1.3) billion and free cash flow of ($2.0) billion (non-GAAP)*.
“It will take time to return Boeing to its former legacy, but with the right focus and culture, we can be an iconic company and aerospace leader once again,” said Kelly Ortberg, Boeing President and Chief Executive Officer. “Going forward, we will be focused on fundamentally changing the culture, stabilizing the business, and improving program execution, while setting the foundation for the future of Boeing.”
|
Table 2. Cash Flow |
Third Quarter |
Nine Months |
|||||||||||||||||||||||||||||
|
(Millions) |
2024 |
2023 |
2024 |
2023 |
|||||||||||||||||||||||||||
|
Operating cash flow |
($1,345) |
$22 |
($8,630) |
$2,579 |
|||||||||||||||||||||||||||
|
Less additions to property,
plant & equipment |
($611) |
($332) |
($1,582) |
($1,096) |
|||||||||||||||||||||||||||
|
Free cash flow* |
($1,956) |
($310) |
($10,212) |
$1,483 |
|||||||||||||||||||||||||||
|
*Non-GAAP measure;
complete definitions of Boeing's non-GAAP measures are on page 5,
"Non-GAAP Measures Disclosures." |
|||||||||||||||||||||||||||||||
Operating cash flow was ($1.3) billion in the
quarter reflecting lower commercial widebody deliveries, as well as unfavorable
working capital timing, including the impact of the IAM work stoppage (Table
2).
|
Table 3. Cash, Marketable Securities and Debt Balances |
Quarter End |
|||||||||||||
|
(Billions) |
3Q 2024 |
2Q 2024 |
||||||||||||
|
Cash |
$10.0 |
$10.9 |
||||||||||||
|
Marketable securities1 |
$0.5 |
$1.7 |
||||||||||||
|
Total |
$10.5 |
$12.6 |
||||||||||||
|
Consolidated debt |
$57.7 |
$57.9 |
||||||||||||
|
1 Marketable securities
consist primarily of time deposits due within one year classified as
"short-term investments." |
||||||||||||||
Cash and investments in marketable securities totaled $10.5
billion, compared to $12.6 billion at the beginning of the quarter
driven by free cash flow usage in the quarter (Table 3). In October, the
company entered into a new $10.0 billion short-term
credit facility and now has access to total credit facilities of $20.0
billion, which remain undrawn.
Total company backlog at quarter end was $511 billion.
Segment Results
Commercial Airplanes
|
Table 4. Commercial Airplanes |
Third Quarter |
Nine Months |
||||||||||||||||||||||||||||||||||||
|
(Dollars in Millions) |
2024 |
2023 |
Change |
2024 |
2023 |
Change |
||||||||||||||||||||||||||||||||
|
Deliveries |
116 |
105 |
10 % |
291 |
371 |
(22) % |
||||||||||||||||||||||||||||||||
|
Revenues |
$7,443 |
$7,876 |
(5) % |
$18,099 |
$23,420 |
(23) % |
||||||||||||||||||||||||||||||||
|
Loss from operations |
($4,021) |
($678) |
NM |
($5,879) |
($1,676) |
NM |
||||||||||||||||||||||||||||||||
|
Operating margins |
(54.0) |
% |
(8.6) |
% |
NM |
(32.5) |
% |
(7.2) |
% |
NM |
||||||||||||||||||||||||||||
Commercial Airplanes third quarter revenue of $7.4 billion and operating margin of (54.0) percent reflect previously announced pre-tax charges of $3.0 billion on the 777X and 767 programs as well as the IAM work stoppage and higher period expense, including research and development (Table 4).
The 787 program is currently producing at 4 per month and
maintains plans to return to 5 per month by year end. In the quarter,
Commercial Airplanes booked 49 net orders and delivered 116 airplanes, with
backlog of over 5,400 airplanes valued at $428 billion.
Defense, Space & Security
|
Table 5. Defense, Space & Security |
Third Quarter |
Nine Months |
||||||||||||||||||||||||||||||||||||
|
(Dollars in Millions) |
2024 |
2023 |
Change |
2024 |
2023 |
Change |
||||||||||||||||||||||||||||||||
|
Revenues |
$5,536 |
$5,481 |
1 % |
$18,507 |
$18,187 |
2 % |
||||||||||||||||||||||||||||||||
|
Loss from operations |
($2,384) |
($924) |
NM |
($3,146) |
($1,663) |
NM |
||||||||||||||||||||||||||||||||
|
Operating margins |
(43.1) |
% |
(16.9) |
% |
NM |
(17.0) |
% |
(9.1) |
% |
NM |
||||||||||||||||||||||||||||
Defense, Space & Security third quarter revenue of $5.5
billion and operating margin of (43.1) percent reflect the previously
announced pre-tax charges of $2.0 billion on the T-7A, KC-46A Tanker,
Commercial Crew, and MQ-25 programs. Results also reflect unfavorable
performance on other programs.
During the quarter, Defense, Space & Security delivered
the first production MH-139A to the U.S. Air Force and definitized a contract
for two E-7A Wedgetails from the U.S. Air Force. Backlog at Defense, Space
& Security was $62 billion, of which 28 percent represents orders from
customers outside the U.S.
Global Services
|
Table 6. Global Services |
Third Quarter |
Nine Months |
||||||||||||||||||||||||||||||||||||
|
(Dollars in Millions) |
2024 |
2023 |
Change |
2024 |
2023 |
Change |
||||||||||||||||||||||||||||||||
|
Revenues |
$4,901 |
$4,812 |
2 % |
$14,835 |
$14,278 |
4 % |
||||||||||||||||||||||||||||||||
|
Earnings from operations |
$834 |
$784 |
6 % |
$2,620 |
$2,487 |
5 % |
||||||||||||||||||||||||||||||||
|
Operating margins |
17.0 |
% |
16.3 |
% |
0.7 pts |
17.7 |
% |
17.4 |
% |
0.3 pts |
||||||||||||||||||||||||||||
Global Services third quarter revenue of $4.9 billion and
operating margin of 17.0 percent reflect higher commercial volume and
mix.
During the quarter, Global Services secured agreements for
Landing Gear Exchange Program and Integrated Material Management with All
Nippon Airways and a KC-135 spares contract from the U.S. Air Force.
Additional Financial Information
|
Table 7. Additional Financial Information |
Third Quarter |
Nine Months |
||||||||||||||||||||||||
|
(Dollars in Millions) |
2024 |
2023 |
2024 |
2023 |
||||||||||||||||||||||
|
Revenues |
||||||||||||||||||||||||||
|
Unallocated items, eliminations and other |
($40) |
($65) |
($166) |
($109) |
||||||||||||||||||||||
|
Loss from operations |
||||||||||||||||||||||||||
|
Other unallocated items and eliminations |
($418) |
($271) |
($1,364) |
($1,067) |
||||||||||||||||||||||
|
FAS/CAS service cost adjustment |
$228 |
$281 |
$832 |
$863 |
||||||||||||||||||||||
|
Other income, net |
$265 |
$297 |
$790 |
$919 |
||||||||||||||||||||||
|
Interest and debt expense |
($728) |
($589) |
($1,970) |
($1,859) |
||||||||||||||||||||||
|
Effective tax rate |
0.8 |
% |
(48.9) |
% |
1.8 |
% |
(10.8) |
% |
||||||||||||||||||
Other unallocated items and eliminations primarily reflects
timing of allocations.
Non-GAAP Measures Disclosures
We supplement the reporting of our financial information
determined under Generally Accepted Accounting Principles in the United
States of America (GAAP) with certain non-GAAP financial information. The
non-GAAP financial information presented excludes certain significant items
that may not be indicative of, or are unrelated to, results from our ongoing
business operations. We believe that these non-GAAP measures provide investors
with additional insight into the company's ongoing business performance. These
non-GAAP measures should not be considered in isolation or as a substitute for
the related GAAP measures, and other companies may define such measures
differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on
any single financial measure. The following definitions are provided:
Core Operating Earnings/(loss), Core Operating Margin and
Core Earnings/(loss) Per Share
Core operating earnings/(loss) is defined as GAAP Earnings/(loss)
from operations excluding the FAS/CAS service cost
adjustment. The FAS/CAS service cost adjustment represents
the difference between the Financial Accounting Standards (FAS) pension and
postretirement service costs calculated under GAAP and costs allocated to the
business segments. Core operating margin is defined as Core operating
earnings/(loss) expressed as a percentage of revenue. Core earnings/(loss) per
share is defined as GAAP Diluted earnings/(loss) per share excluding
the net earnings/(loss) per share impact of the FAS/CAS service cost
adjustment and Non-operating pension
and postretirement expenses. Non-operating pension and postretirement
expenses represent the components of net periodic benefit costs other than
service cost. Pension costs allocated to BDS and BGS businesses supporting
government customers are computed in accordance with U.S. Government Cost
Accounting Standards (CAS), which employ different actuarial assumptions and
accounting conventions than GAAP. CAS costs are allocable to government
contracts. Other postretirement benefit costs are allocated to all business
segments based on CAS, which is generally based on benefits paid. Management
uses core operating earnings/(loss), core operating margin and core
earnings/(loss) per share for purposes of evaluating and forecasting underlying
business performance. Management believes these core measures provide investors
additional insights into operational performance as they exclude non-service
pension and post-retirement costs, which primarily represent costs driven by
market factors and costs not allocable to government contracts. A reconciliation
of these non-GAAP measures to the most directly comparable GAAP measure is
provided on page 12 and 13.
Free Cash Flow
Free cash flow is GAAP operating cash flow reduced
by capital expenditures for property, plant and equipment.
Management believes free cash flow provides investors with an important
perspective on the cash available for shareholders, debt repayment, and
acquisitions after making the capital investments required to support ongoing
business operations and long term value creation. Free
cash flow does not represent the residual cash flow available for discretionary
expenditures as it excludes certain mandatory expenditures such as repayment of
maturing debt. Management uses free cash flow as a measure to assess both
business performance and overall liquidity. See Table 2 on page 2 for
reconciliation of free cash flow to GAAP operating cash flow.
Boeing President and CEO Kelly Ortberg's prepared
remarks for the third quarter results webcast can be accessed here:
Caution Concerning Forward-Looking Statements
This press release contains "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995. Words such as "may," "should,"
"expects," "intends," "projects,"
"plans," "believes," "estimates,"
"targets," "anticipates," and other similar words or
expressions, or the negative thereof, generally can be used to help identify
these forward-looking statements. Examples of forward-looking statements
include statements relating to our future financial condition and operating results,
as well as any other statement that does not directly relate to any historical
or current fact. Forward-looking statements are based on expectations and
assumptions that we believe to be reasonable when made, but that may not prove
to be accurate. These statements are not guarantees and are subject to risks,
uncertainties, and changes in circumstances that are difficult to predict. Many
factors could cause actual results to differ materially and adversely from
these forward-looking statements. Among these factors are risks related to: (1)
general conditions in the economy and our industry, including those due to
regulatory changes; (2) our reliance on our commercial airline customers; (3)
the overall health of our aircraft production system, production quality
issues, commercial airplane production rates, our ability to successfully
develop and certify new aircraft or new derivative aircraft, and the ability of
our aircraft to meet stringent performance and reliability standards; (4) our
pending acquisition of Spirit AeroSystems Holdings, Inc. (Spirit), including
the satisfaction of closing conditions in the expected timeframe or at all, (5)
changing budget and appropriation levels and acquisition priorities of the U.S.
government, as well as significant delays in U.S. government appropriations;
(6) our dependence on our subcontractors and suppliers, as well as the
availability of highly skilled labor and raw materials; (7) work stoppages or
other labor disruptions; (8) competition within our markets; (9) our non-U.S.
operations and sales to non-U.S. customers; (10) changes in accounting
estimates; (11) realizing the anticipated benefits of mergers, acquisitions,
joint ventures/strategic alliances or divestitures, including anticipated
synergies and quality improvements related to our pending acquisition of
Spirit; (12) our dependence on U.S. government contracts; (13) our reliance on
fixed-price contracts; (14) our reliance on cost-type contracts; (15) contracts
that include in-orbit incentive payments; (16) unauthorized access to our, our
customers' and/or our suppliers' information and systems; (17) potential
business disruptions, including threats to physical security or our information
technology systems, extreme weather (including effects of climate change) or
other acts of nature, and pandemics or other public health crises; (18)
potential adverse developments in new or pending litigation and/or government
inquiries or investigations; (19) potential environmental liabilities; (20)
effects of climate change and legal, regulatory or market responses to such
change; (21) credit rating agency actions and changes in our ability to obtain
debt financing on commercially reasonable terms, at competitive rates and in
sufficient amounts; (22) substantial pension and other postretirement benefit
obligations; (23) the adequacy of our insurance coverage; and (24) customer and
aircraft concentration in our customer financing portfolio.
Additional information concerning these and other factors
can be found in our filings with the Securities and Exchange Commission,
including our most recent Annual Report on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K. Any forward-looking statement speaks only
as of the date on which it is made, and we assume no obligation to update or
revise any forward-looking statement, whether as a result of
new information, future events, or otherwise, except as required by law.
