Boeing reports £4.6bn quarterly loss ahead of vote by union members
Machinists are due to vote on a strike that has crippled the firm’s aircraft production for more than a month.
Boeing has reported a massive loss of more than six billion dollars (£4.6 billion) in the third quarter, dragged down by a work stoppage and charges tied to its commercial aircraft and defence programmes.
Wednesday is shaping up as one of the most significant days in a volatile year for Boeing, which will also introduce its new chief executive on his first earnings call, and learn if machinists will end a strike that has crippled the company’s aircraft production for more than a month.
The strike is an early test for Kelly Ortberg, a Boeing outsider who became chief executive in August.
“The trust in our company has eroded. We’re saddled with too much debt. We’ve had serious lapses in our performance across the company, which have disappointed many of our customers,” he said.
Mr Ortberg also highlighted the company’s strengths, including a backlog of plane orders valued at half a trillion dollars (£770 billion).
He has already announced large-scale layoffs and a plan to raise enough cash to avoid a bankruptcy filing. He also needs to convince federal regulators that Boeing is fixing its safety culture and is ready to boost production of the 737 Max – a crucial step to bring in much-needed cash.
Boeing cannot produce any new 737s, however, until it ends the five-week-old strike by 33,000 machinists that has shut down assembly plants in the Seattle area.
Mr Ortberg has “got a lot on his plate, but he probably is laser-focused on getting this negotiation completed”, said Tony Bancroft, portfolio manager at Gabelli Funds, a Boeing investor. “That’s the closest alligator to the boat.”
Boeing has not had a profitable year since 2018, and the situation is about to get worse before it gets better.
The firm said it lost 9.97 dollars per share for the period ended September 30, with an adjusted loss of 10.44 dollars per share. Analysts polled by Zacks Investment Research were calling for a loss of 10.34 dollars per share.
Revenue totalled 17.84 billion dollars (£13.81 billion), matching Wall Street estimates.
Company shares dipped 1% before the opening bell.
Investors will be looking for Mr Ortberg to project calm, determination and urgency as he presides over an earnings call for the first time since he ran Rockwell Collins, a maker of avionics and flight controls for airline and military planes, in the last decade.
The biggest news of the day, however, is likely to come Wednesday evening, when the International Association of Machinists and Aerospace Workers reveals whether striking workers are ready to go back to their jobs.
They will vote at union halls in the Seattle area and elsewhere on a Boeing offer that includes pay raises of 35% over four years, 7,000 dollar (£5,390) ratification bonuses, and the retention of performance bonuses that Boeing wanted to eliminate.
Boeing has held firm in resisting a union demand to restore the traditional pension plan that was frozen a decade. However, older workers would get a slight increase in their monthly pension payouts.
