Boeing's Wider-Than-Expected Q4 Loss: A Setback or a Stepping Stone?

Boeing Co. (NYSE: BA) shares fell in afterhours trading on Thursday, January 24, 2025, following the company's announcement of a wider-than-expected fourth-quarter loss. The aerospace giant reported a loss of $5.46 per share, compared to the consensus estimate of a loss of $1.55 per share. Revenue for the quarter came in at $15.2 billion, missing the Zacks Consensus Estimate of $16.56 billion. The company attributed the wider loss to charges associated with last year's layoffs, a work stoppage, and agreement with the International Association of Machinists and Aerospace Workers (IAM).



Boeing's fourth-quarter results reflect the impact of several factors that contributed to the company's wider-than-expected loss. The IAM work stoppage and agreement resulted in lower deliveries and pre-tax earnings charges of $1.1 billion on the 777X and 767 programs. The 777X program pre-tax charge of $0.9 billion reflects higher estimated labor costs associated with finalizing the IAM agreement, which will be incurred over the next several years. The company still anticipates first delivery of the 777-9 in 2026. Additionally, Boeing recognized pre-tax earnings charges of $1.7 billion on various defense programs, including the KC-46A, T-7A, Commercial Crew, VC-25B, and MQ-25. The KC-46A program pre-tax charge of $0.8 billion reflects higher estimated manufacturing costs, including impacts of the IAM work stoppage and agreement. The T-7A program pre-tax charge of $0.5 billion was primarily driven by higher estimated costs on production lots in 2026 and beyond.



Despite these challenges, Boeing resumed production of 737, 767, and 777/777X models and strengthened its balance sheet through a successful capital raise. CEO Kelly Ortberg emphasized the company's focus on stabilization and building a sustainable future. However, the company's shares have fallen 12% over the past 12 months, underperforming the Zacks aerospace-defense industry's decline of 2.3%. Shares of Embraer ERJ, Leidos Holdings LDOS, and Lockheed Martin LMT have rallied 137.7%, 44.3%, and 10.5%, respectively, year to date.



Boeing's wider-than-expected Q4 loss is a setback for the company, but it is not a definitive indication of its long-term prospects. The company faces near-term challenges, but it is taking important steps to stabilize its business and build a sustainable future. Investors should consider the company's long-term growth prospects and its ability to overcome these challenges before making investment decisions. Boeing's management team must focus on addressing the current issues, stabilizing operations, and restoring investor confidence in the company's long-term growth prospects. By doing so, Boeing can overcome this setback and continue to be a leader in the global aerospace market.