Boeing Co (BA) Q3 2024 Earnings Call Highlights: Navigating Challenges with Strategic Focus

GuruFocus News
4 min read

In This Article:

  • Revenue: $17.8 billion, down 1% year-over-year.

  • Core Loss Per Share: $10.44, impacted by IAM work stoppage and charges on commercial and defense programs.

  • Free Cash Flow: Use of $2 billion, affected by lower deliveries and unfavorable working capital timing.

  • Boeing Commercial Airplanes Revenue: $7.4 billion, with an operating margin of minus 54%.

  • Commercial Airplanes Deliveries: 116 airplanes in the quarter.

  • Backlog: $428 billion, including over 5,400 airplanes.

  • Boeing Defense & Space Revenue: $5.5 billion, stable year-over-year.

  • Boeing Defense & Space Operating Margin: Minus 43.1%.

  • Boeing Global Services Revenue: $4.9 billion, up 2% year-over-year.

  • Boeing Global Services Operating Margin: 17%, up 70 basis points from last year.

  • Cash and Marketable Securities: $10.5 billion at quarter-end.

  • Total Debt: $57.7 billion.

  • New Credit Facility: $10 billion short-term credit facility, totaling $20 billion in access.

Release Date: October 23, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Boeing Co (NYSE:BA) has a substantial backlog of approximately $0.5 trillion, indicating strong demand for its products.

  • The company is committed to a cultural transformation, aiming to restore its leadership position in the aerospace industry.

  • Boeing Co (NYSE:BA) is actively working on stabilizing its business, with a focus on resolving the IAM strike and restarting production.

  • The company is implementing a safety and quality management system to guide production restarts and improve execution discipline.

  • Boeing Global Services continues to perform well, with revenue growth and strong operating margins.

Negative Points

  • Boeing Co (NYSE:BA) reported a core loss per share of $10.44, primarily due to the IAM work stoppage and charges on commercial and defense programs.

  • Free cash flow was negative, with a usage of $2 billion in the quarter, impacted by lower deliveries and unfavorable working capital timing.

  • The company faces significant challenges in its defense business, with $2 billion in pre-tax charges on several programs.

  • Boeing Co (NYSE:BA) is dealing with a high debt level, ending the quarter with $57.7 billion in debt.

  • The company anticipates negative free cash flow for the full year 2025, with ongoing challenges in ramping up production and managing costs.

Q & A Highlights

Q: What is core and non-core outside of Boeing Commercial Airplanes, and how significant is portfolio shaping in your turnaround strategy? A: Kelly Ortberg, President and CEO, stated that Boeing is better off doing less and doing it better. The company is evaluating its portfolio to determine what adds value and what distracts from its main goals. While commercial airplanes and defense systems remain core, there may be fringe areas that could be more efficient or distracting.

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