Boeing reported significant operating cash flow losses of $3.5 billion in its fourth quarter due to the effects of the IAM work stoppage, workforce reductions, and changes to its defense business. The company also expects a GAAP loss per share of $5.46 for the quarter, compared to an estimated loss of $1.32 on Bloomberg. Boeing plans to take pre-tax charges of $1.7 billion in its defense and space operations.
Despite the challenges, Boeing’s stock rose slightly in early trading. The company noted that it took important steps to stabilize its business during the quarter, including reaching an agreement with its IAM-represented workers and conducting a successful capital raise to improve its balance sheet. Boeing also restarted production for its 737, 767, and 777/777X jet programs after an eight-week strike.
The IAM strike, which ended in November with a four-year contract, is expected to lead to higher labor costs, resulting in pre-tax charges of $1.1 billion for the 777X and 767 programs. Following the strike, Boeing increased IAM member pay by 38% over four years and made other adjustments, including expanding 401(k) match rates. Boeing also laid off hundreds of workers at its bases in Washington state and California, with plans to reduce its headcount by 10%.
The company delivered 57 planes in the fourth quarter, including 36 737 Max jets, 15 787 Dreamliners, three 767s, and three 777 jets. For the year, Boeing reported delivering 348 commercial jets, down a third compared to last year. Its cash position was threatened earlier in the year, leading to a share sale announcement to boost reserves.
Boeing will report fourth-quarter and full-year results on January 28 before the market opens. This article is provided for informational purposes only.
Source: https://finance.yahoo.com/news/boeing-lost-35-billion-due-to-labor-strikes-and-layoffs-in-the-fourth-quarter-125039606.html