Boeing Reports Third Quarter 2024 Results

Boeing 787-9 Dreamliner VP-BDA AJW

Posted By: Jeroen Vogelaar October 25, 2024

Third Quarter 2024

  • Financials reflect impacts of the International Association of Machinists and Aerospace Workers (IAM) work stoppage and previously announced charges on commercial and defense programs
  • Revenue of $17.8 billion, GAAP loss per share of ($9.97) and core (non-GAAP)* loss per share of ($10.44)
  • Operating cash flow of ($1.3) billion and free cash flow of ($2.0) billion (non-GAAP)*
  • Total company backlog of $511 billion, including over 5,400 commercial airplanes
Table 1. Summary Financial ResultsThird QuarterNine Months
(Dollars in Millions, except per share data)20242023Change20242023Change
Revenues$17,840$18,104(1) %$51,275$55,776(8) %
GAAP
Loss from operations($5,761)($808)NM($6,937)($1,056)NM
Operating margins(32.3)%(4.5)%NM(13.5)%(1.9)%NM
Net loss($6,174)($1,638)NM($7,968)($2,212)NM
Basic loss per share($9.97)($2.70)NM($12.91)($3.64)NM
Operating cash flow($1,345)$22NM($8,630)$2,579NM
Non-GAAP*
Core operating loss($5,989)($1,089)NM($7,769)($1,919)NM
Core operating margins(33.6)%(6.0)%NM(15.2)%(3.4)%NM
Core loss per share($10.44)($3.26)NM($14.52)($5.35)NM
*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 5, “Non-GAAP Measures Disclosures.” 

The Boeing Company [NYSE: BA] recorded third quarter revenue of $17.8 billion, GAAP loss per share of ($9.97) and core loss per share (non-GAAP)* of ($10.44) (Table 1) primarily reflecting impacts of the IAM work stoppage and previously announced charges on commercial and defense programs. Boeing reported operating cash flow of ($1.3) billion and free cash flow of ($2.0) billion (non-GAAP)*.

“It will take time to return Boeing to its former legacy, but with the right focus and culture, we can be an iconic company and aerospace leader once again,” said Kelly Ortberg, Boeing President and Chief Executive Officer. “Going forward, we will be focused on fundamentally changing the culture, stabilizing the business, and improving program execution, while setting the foundation for the future of Boeing.” 

Table 2. Cash FlowThird QuarterNine Months
(Millions)2024202320242023
Operating cash flow($1,345)$22($8,630)$2,579
Less additions to property, plant & equipment($611)($332)($1,582)($1,096)
Free cash flow*($1,956)($310)($10,212)$1,483
*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 5, “Non-GAAP Measures Disclosures.” 

Operating cash flow was ($1.3) billion in the quarter reflecting lower commercial widebody deliveries, as well as unfavorable working capital timing, including the impact of the IAM work stoppage (Table 2).

Table 3. Cash, Marketable Securities and Debt BalancesQuarter End
(Billions)3Q 20242Q 2024
Cash$10.0$10.9
Marketable securities1$0.5$1.7
Total$10.5$12.6
Consolidated debt$57.7$57.9
1 Marketable securities consist primarily of time deposits due within one year classified as “short-term investments.”

Cash and investments in marketable securities totaled $10.5 billion, compared to $12.6 billion at the beginning of the quarter driven by free cash flow usage in the quarter (Table 3). In October, the company entered into a new $10.0 billion short-term credit facility and now has access to total credit facilities of $20.0 billion, which remain undrawn.

Total company backlog at quarter end was $511 billion.

Segment Results

Commercial Airplanes

Table 4. Commercial AirplanesThird QuarterNine Months
(Dollars in Millions)20242023Change20242023Change
Deliveries11610510 %291371(22) %
Revenues$7,443$7,876(5) %$18,099$23,420(23) %
Loss from operations($4,021)($678)NM($5,879)($1,676)NM
Operating margins(54.0)%(8.6)%NM(32.5)%(7.2)%NM

Commercial Airplanes third quarter revenue of $7.4 billion and operating margin of (54.0) percent reflect previously announced pre-tax charges of $3.0 billion on the 777X and 767 programs as well as the IAM work stoppage and higher period expense, including research and development (Table 4).

The 787 program is currently producing at 4 per month and maintains plans to return to 5 per month by year end. In the quarter, Commercial Airplanes booked 49 net orders and delivered 116 airplanes, with backlog of over 5,400 airplanes valued at $428 billion.

Defense, Space & Security

Table 5. Defense, Space & SecurityThird QuarterNine Months
(Dollars in Millions)20242023Change20242023Change
Revenues$5,536$5,4811 %$18,507$18,1872 %
Loss from operations($2,384)($924)NM($3,146)($1,663)NM
Operating margins(43.1)%(16.9)%NM(17.0)%(9.1)%NM

Defense, Space & Security third quarter revenue of $5.5 billion and operating margin of (43.1) percent reflect the previously announced pre-tax charges of $2.0 billion on the T-7A, KC-46A Tanker, Commercial Crew, and MQ-25 programs. Results also reflect unfavorable performance on other programs.

During the quarter, Defense, Space & Security delivered the first production MH-139A to the U.S. Air Force and definitized a contract for two E-7A Wedgetails from the U.S. Air Force. Backlog at Defense, Space & Security was $62 billion, of which 28 percent represents orders from customers outside the U.S.

Global Services

Table 6. Global ServicesThird QuarterNine Months
(Dollars in Millions)20242023Change20242023Change
Revenues$4,901$4,8122 %$14,835$14,2784 %
Earnings from operations$834$7846 %$2,620$2,4875 %
Operating margins17.0%16.3%0.7 pts17.7%17.4%0.3 pts

Global Services third quarter revenue of $4.9 billion and operating margin of 17.0 percent reflect higher commercial volume and mix. 

During the quarter, Global Services secured agreements for Landing Gear Exchange Program and Integrated Material Management with All Nippon Airways and a KC-135 spares contract from the U.S. Air Force.

Additional Financial Information

Table 7. Additional Financial InformationThird QuarterNine Months
(Dollars in Millions)2024202320242023
Revenues
Unallocated items, eliminations and other($40)($65)($166)($109)
Loss from operations
Other unallocated items and eliminations($418)($271)($1,364)($1,067)
FAS/CAS service cost adjustment$228$281$832$863
Other income, net$265$297$790$919
Interest and debt expense($728)($589)($1,970)($1,859)
Effective tax rate0.8%(48.9)%1.8%(10.8)%

Other unallocated items and eliminations primarily reflects timing of allocations.

Non-GAAP Measures Disclosures

We supplement the reporting of our financial information determined under Generally Accepted Accounting Principles in the United States of America (GAAP) with certain non-GAAP financial information. The non-GAAP financial information presented excludes certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures provide investors with additional insight into the company’s ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following definitions are provided: 

Core Operating Earnings/(loss), Core Operating Margin and Core Earnings/(loss) Per Share

Core operating earnings/(loss) is defined as GAAP Earnings/(loss) from operations excluding the FAS/CAS service cost adjustment. The FAS/CAS service cost adjustment represents the difference between the Financial Accounting Standards (FAS) pension and postretirement service costs calculated under GAAP and costs allocated to the business segments. Core operating margin is defined as Core operating earnings/(loss) expressed as a percentage of revenue. Core earnings/(loss) per share is defined as GAAP Diluted earnings/(loss) per share excluding the net earnings/(loss) per share impact of the FAS/CAS service cost adjustment and Non-operating pension and postretirement expenses. Non-operating pension and postretirement expenses represent the components of net periodic benefit costs other than service cost. Pension costs allocated to BDS and BGS businesses supporting government customers are computed in accordance with U.S. Government Cost Accounting Standards (CAS), which employ different actuarial assumptions and accounting conventions than GAAP. CAS costs are allocable to government contracts. Other postretirement benefit costs are allocated to all business segments based on CAS, which is generally based on benefits paid. Management uses core operating earnings/(loss), core operating margin and core earnings/(loss) per share for purposes of evaluating and forecasting underlying business performance. Management believes these core measures provide investors additional insights into operational performance as they exclude non-service pension and post-retirement costs, which primarily represent costs driven by market factors and costs not allocable to government contracts. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measure is provided on page 12 and 13.

Free Cash Flow

Free cash flow is GAAP operating cash flow reduced by capital expenditures for property, plant and equipment. Management believes free cash flow provides investors with an important perspective on the cash available for shareholders, debt repayment, and acquisitions after making the capital investments required to support ongoing business operations and long term value creation. Free cash flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses free cash flow as a measure to assess both business performance and overall liquidity. See Table 2 on page 2 for reconciliation of free cash flow to GAAP operating cash flow.