Boeing’s preliminary Q3 results paint a stark picture, with revenue and EPS significantly below analyst expectations, primarily driven by the ongoing International Association of Machinists (IAM) strike and substantial pre-tax charges on critical commercial and defense programs. For long-term investors, these figures underscore the deep-seated challenges still facing CEO Kelly Ortberg’s turnaround efforts, emphasizing the importance of closely monitoring delivery rates, cash flow management, and resolution of labor disputes amidst a complex production environment.
The aerospace giant, Boeing (BA), has once again found itself under investor scrutiny following the release of its preliminary third-quarter results. While initial analyst expectations, as per Bloomberg consensus, had projected revenue around $22.29 billion, the company’s own preliminary figures revealed a much bleaker reality: a mere $17.8 billion in revenue. This substantial shortfall, alongside a staggering GAAP loss per share of ($9.97), highlights the persistent headwinds battling CEO Kelly Ortberg’s ambitious turnaround strategy.
A year ago, Boeing reported a net loss of $6.17 billion and a cash flow burn of $1.34 billion, primarily due to a previous machinists union strike and quality-related delivery slowdowns. While this quarter’s operating cash flow remained negative at ($1.3) billion, the preliminary results indicate that many of the core issues, including labor disputes and program execution, continue to weigh heavily on the company’s financial health, as detailed in their official preliminary report released on October 11, 2024, by Boeing MediaRoom. Boeing MediaRoom.
Diving Deeper: The Impact of Charges and the IAM Strike
The primary drivers behind the significantly worsened preliminary figures are twofold: substantial pre-tax earnings charges across key programs and the ongoing International Association of Machinists and Aerospace Workers (IAM) work stoppage. This labor dispute, now in its 13th week, has continued to disrupt operations, particularly at Boeing’s St. Louis defense plant where workers rejected the company’s latest contract proposal.
The direct financial hits include:
- Commercial Airplanes Segment: Pre-tax charges of $3.0 billion.
- Defense, Space & Security Segment: Pre-tax charges of $2.0 billion.
Commercial Airplanes: Delays and Deliveries
Within the commercial segment, the delays plaguing the 777X wide-body jet are a major concern. Boeing now anticipates the first delivery of the 777-9 in 2026 and the 777-8 freighter in 2028. These protracted timelines, resulting from certification delays and the IAM strike, have led to a $2.6 billion pre-tax charge. Furthermore, the company plans to conclude production of the 767 freighter, incurring an additional $0.4 billion charge, also reflecting the IAM strike’s impact. Moving forward, from 2027, Boeing will focus solely on producing 767-2C aircraft to support the KC-46A tanker program.
Despite these setbacks, there was a glimmer of positive news on the delivery front for some established programs. Boeing’s Q3 commercial deliveries reached 160 jets, an improvement from 150 last quarter and 116 a year ago. Key figures include:
- 737 MAX jets: 121 delivered (up from 92 a year ago)
- 787 jets: 24 delivered (up from 14 last year)
- 777s: 9 delivered (up from 4 last year)
- 767s: 6 delivered (consistent with last year)
The FAA recently approved Boeing to increase its 737 MAX production rate from 38 to 42 aircraft per month, a testament to meeting certain manufacturing and safety milestones. CEO Ortberg’s stated goal is to be ready for a rate of 47 per month by the end of the year, with that increase likely materializing in 2026.
Defense, Space & Security: Continued Challenges
The defense segment also faced significant program charges totaling $2.0 billion. This includes $0.9 billion for the T-7A program due to higher estimated production costs in 2026 and beyond, and $0.7 billion for the KC-46A program, affected by the 767 freighter production decision and the ongoing IAM work stoppage. These charges, combined with unfavorable performance on other programs, resulted in an operating margin of (43.1)% for the segment, emphasizing the persistent cost overruns that have plagued Boeing’s defense contracts.
Ortberg’s Turnaround: Progress Amidst Headwinds
Since his appointment as CEO in August of last year, Kelly Ortberg has championed a turnaround for the troubled aviation giant. While the latest preliminary Q3 results show deeper financial losses than anticipated, his commitment to strategic decisions and structural changes for long-term competitiveness remains clear. The positive trajectory in overall commercial deliveries, coupled with the FAA’s approval for increased 737 MAX production, indicates that efforts to stabilize manufacturing are yielding some fruit.
For investors, the 27% year-to-date stock increase reflects a degree of confidence in Ortberg’s leadership and the company’s potential to navigate these turbulent times. However, the ongoing IAM strike and the substantial program charges serve as stark reminders that the path to full recovery is fraught with challenges.
The Competitive Landscape: Boeing vs. Airbus
In the global battle for market share, Boeing continues to trail its main rival, Airbus. Airbus surpassed Boeing in global deliveries in 2019 and has maintained its lead ever since. While Airbus reaffirmed its forecast for the year, it also faces its own set of challenges, particularly persistent engine supply issues, as reported in their Half-Year H1 2025 results. Airbus Newsroom. This indicates that supply chain vulnerabilities and production bottlenecks are industry-wide concerns, not just unique to Boeing.
Long-Term Investor Outlook
For the dedicated investor community, Boeing presents a complex long-term play. The company’s resilience is undeniable, backed by significant new orders from carriers like Norwegian Group, Turkish Airlines, WestJet, and Korean Air in Q3. These orders underscore the enduring demand for its aircraft and the critical role Boeing plays in global aviation.
However, the Q3 preliminary results highlight key areas demanding vigilance:
- Labor Relations: The swift resolution of the IAM strike is crucial to prevent further program delays and cost escalations.
- Program Execution: Delays in key programs like the 777X and cost overruns in defense contracts continue to erode profitability.
- Cash Flow Management: Reducing cash burn remains a top priority for financial stability.
- Quality Control: Following incidents like the Alaska Airlines door plug blowout, maintaining stringent quality standards is paramount for regulatory trust and brand reputation.
While Ortberg’s strategic decisions are laying the groundwork for future competitiveness, the journey will require patience and close monitoring of execution. Boeing’s ability to overcome these deep-seated challenges will ultimately determine its long-term investment viability.
