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Boeing Faces $11.8 Billion Loss but Sees Hope in Production Growth and Recovery Plans
Annual Loss and Production Struggles
Boeing faces $11.8 billion loss for 2024, its biggest annual deficit in four years. This loss was driven by challenges in its major units, a disruptive strike, and ongoing regulatory pressures. The company also faced fallout from production issues, including safety concerns following a major mid-air accident.
CEO Confident in Production Recovery
Despite the financial setbacks, CEO Kelly Ortberg remains confident in the company’s ability to restore stability. Boeing’s shares rose nearly 8% as the company ramped up production, with plans to increase the monthly production of its 737 jets to 38, pending approval from the Federal Aviation Administration (FAA).
Focus on Supply Chain and Wider Aircraft Production
Boeing’s production of widebody 787 jets has been hampered by supply chain difficulties, including shortages of parts like seats. The company aims to increase production of these jets from five per month to seven by the next quarter.
Financial Outlook and Cost-Cutting Measures
Boeing has accumulated significant inventory from suppliers, contributing to its financial strain. CFO Brian West stated that as production stabilizes, the company expects to reduce inventory and improve cash flow. The company also aims to achieve positive cash flow by the second half of 2025, though this goal is widely expected to be delayed.
Struggles in Defense and Space
Boeing’s defense, space, and services division faced a major setback in 2024, posting a $5.41 billion loss due to overruns in several fixed-price defense programs. Despite this, Ortberg emphasized that the company is committed to addressing these challenges and working to improve its defense and space operations.
Plans for the Future and Non-Core Asset Sales
As part of its recovery strategy, Boeing is exploring the possibility of selling non-core assets from its defense, space, and services division. However, Ortberg has made it clear that these changes would not represent a major restructuring of the company.
Credit Rating and Cash Burn Concerns
Boeing’s credit rating remains a concern, sitting just above junk status. The company reported a cash burn of $14.3 billion in 2024, a significant increase from 2023’s $4.43 billion. Despite these financial challenges, Boeing is focused on stabilizing its production and addressing past quality and safety issues, with hopes of a return to profitability in the near future.
“Boeing Faces $11.8 Billion Loss but Sees Hope in Production Growth and Recovery Plans” “Boeing Faces $11.8 Billion Loss but Sees Hope in Production Growth and Recovery Plans”