Boeing faces $3 billion Q4 loss related to strikes
Boeing takes $3 billion Q4 hit amid labor strike and program issues
Boeing Co. announced Thursday that it incurred nearly $3 billion in charges during the fourth quarter of 2024, stemming from labour strikes, job cuts, and challenges with various government programs.
As a result, the aerospace giant expects to report a significant loss of $5.46 per share when it releases its full financial results, far exceeding Wall Street's forecast of a $1.80 per share loss, reports The Associated Press.
Impact of Labour Strikes and Production Halts
A major contributing factor to the company's financial struggles was a prolonged strike by machinists at its Renton and Everett, Washington, factories. These workers assemble key models, including the 737 Max, 777, and 767 aircraft. The seven-week strike disrupted production and delivery capabilities before it was resolved with agreements on pay raises and improved benefits.
In addition to the strike, Boeing previously announced a 10% reduction in its workforce, adding further strain to its operations. The company also recorded $1.1 billion in charges related to the 777 and 767 programs and another $1.7 billion tied to government contracts. These setbacks included delays and cost overruns on key projects, such as a military refuelling tanker and the replacement jets for Air Force One.
Boeing’s revenue for the fourth quarter totalled $15.2 billion, significantly below analysts' estimates of $16.6 billion. The disappointing results reflect both production challenges and softer market conditions, capping off a difficult year for the company.
Market Reaction and Future Outlook
The announcement prompted a decline in Boeing's share price as investors digested the magnitude of the losses and ongoing challenges. The company’s ability to recover will depend on its success in stabilizing production, fulfilling government contracts, and mitigating further labour disruptions.
Despite these hurdles, Boeing remains a key player in the aerospace sector. However, the substantial fourth-quarter loss and operational setbacks highlight the critical need for improved efficiency and stronger financial controls as the company looks to rebuild investor confidence.
Reminder, Puma’s shares tumbled by 18% on Thursday after the company reported weaker-than-expected fourth-quarter sales and a drop in annual profit, trailing rival Adidas in performance.
