Boeing is set to report its third-quarter earnings on Wednesday morning, with analysts projecting revenue of $18.22 billion and a significant loss per share of $9.97. The company has already warned that results will be impacted by ongoing issues such as the machinists' union strike, which has disrupted production for over a month, and charges in both its commercial airplanes and defense segments. Boeing has also initiated layoffs and a fundraising effort, including stock and debt sales, to mitigate the financial strain.
The question for investors is whether or not this marks a bottom for the troubled plane maker. The company preannounced results so the Q3 results will not come as a surprise. However, updates on the machinist strikes, potential asset sales and capital raises, and a preliminary outlook for Q4 and 2025 could be key drivers as the stock searches for support in the $150 area.
This earnings report will mark the first for Boeing’s new CEO, Kelly Ortberg, who took over in August following the tenure of Dave Calhoun. Ortberg is stepping into leadership during a challenging time for the company, with Boeing recently issuing preliminary results that fell short of analyst expectations. The company faces ongoing production and financial hurdles, and Ortberg has acknowledged the gravity of the challenges ahead, particularly with continued disruptions from the strike, which analysts estimate is costing Boeing around $1.3 billion per month.
On October 11, Boeing provided guidance for its upcoming Q3 results, anticipating revenue of $17.8 billion, a GAAP loss per share of ($9.97), and negative operating cash flow of $1.3 billion. The company’s cash and marketable securities totaled $10.5 billion at the end of the quarter. Boeing’s CEO, Kelly Ortberg, acknowledged the near-term challenges but emphasized that strategic decisions and structural changes are necessary for Boeing to remain competitive in the long term.
In the Commercial Airplanes segment, Boeing expects to recognize pre-tax earnings charges of $3.0 billion, including $2.6 billion related to delays in the 777X program and $0.4 billion from the conclusion of 767 freighter production. The delays, partially driven by the IAM work stoppage, have pushed the first deliveries of the 777-9 to 2026 and the 777-8 freighter to 2028. The company expects third quarter revenue for Commercial Airplanes to be $7.4 billion, with an operating margin of negative 54.0%.
In the Defense, Space & Security segment, Boeing anticipates pre-tax earnings charges of $2.0 billion, driven by cost increases on key programs such as the T-7A and KC-46A. The T-7A program is expected to incur a $0.9 billion charge, while the KC-46A program will absorb a $0.7 billion charge due to the 767 freighter’s production conclusion and work stoppages. This segment expects Q3 revenue of $5.5 billion, with an operating margin of negative 43.1%.
Boeing is exploring asset sales to raise cash and streamline its operations, as it looks to shed noncore or underperforming units to address its financial struggles. The company's board recently met to review each division, and CEO Ortberg has emphasized the need to focus on core areas while cutting costs and raising at least $10 billion. Boeing has already offloaded a small defense subsidiary and is attempting to sell a joint venture with Lockheed Martin, though other U.S. government programs, like the military refueling tanker and Air Force One replacement, remain problematic. Investors will be closely monitoring for potential asset sales.
On October 15, Boeing entered into a $10 billion supplemental credit agreement. Under the Credit Agreement, Boeing will pay a 0.50% funding fee on each advance, along with a duration fee between 0.50% and 1.00% on outstanding advances and unused commitments. Borrowings not based on SOFR will bear interest at a rate tied to Citibank's base rate, the federal funds rate, or Adjusted Term SOFR, plus 0.375% to 1.00%, depending on Boeing's credit rating. Borrowings based on SOFR will bear interest at Adjusted Term SOFR plus 1.375% to 2.00%, also depending on Boeing's credit rating. The agreement's commitments terminate 120 days after signing, with advances maturing 364 days after.
Boeing and its machinist union reached a tentative agreement to end a five-week strike, with a vote on the deal scheduled for Wednesday, just before Boeing reports its Q3 results. Boeing's latest offer includes a 35% wage increase over four years, up from the previous 25% proposal, though the union had initially sought a 40% raise. The deal, if approved, would significantly raise wages for top earners to nearly $70 per hour by 2028. Despite this potential resolution, Boeing's financial troubles persist, leading some industry insiders and analysts to speculate about the possibility of a breakup or bankruptcy if the company cannot change its trajectory.
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