Boeing offices near the Los Angeles International Airport, in El Segundo, Calif., on Jan. 18, 2024.PATRICK T. FALLON/AFP/Getty Images
Boeing said on Tuesday it was making progress on increasing plane production, and its shares jumped 6 per cent, despite the company recording its biggest annual loss in four years.
The US$11.8-billion loss, due to problems at its major units, along with fallout from a crippling strike, demonstrates the challenges facing CEO Kelly Ortberg in turning around the U.S. plane maker. It has ceded ground to rival Airbus in the delivery race and entered the crosshairs of regulators and customers following a series of missteps.
Boing’s chief financial officer Brian West told analysts the plane maker had delivered 33 of its strongest-selling 737 jets so far in January. Mr. West added that the company expects to be in a position later this year to exceed the cap of 38 a month imposed by U.S. regulators.
Boeing needs the approval of the Federal Aviation Administration to raise 737 output above the cap. “We have a stable production system. We get through that, and I expect by the second half of the year, we’ll have that approval, and we’ll be moving to a higher production rate,” Mr. Ortberg told CNBC earlier in the day.
Boeing delivered 17 Max jets in December.
Mr. Ortberg told Reuters he is “not too worried” about U.S. President Donald Trump’s threats to impose tariffs on trade partners, including countries that are important parts of Boeing’s far-flung supply chain.
Mr. Ortberg, who took the helm of the plane maker in August, said the company is restoring production stability after a harrowing mid-air accident a year ago raised concerns about the safety of its jets.
Boeing, which has returned to a production rate of five per month for its wide-body 787 jets, will move to a rate of seven a month “when our performance indicators say the production system is stable, and hopefully that’s in the next quarter or so,” Mr. Ortberg added.
Mr. West reiterated that the company will burn cash during the first half of the year, but cash flow will turn positive in the back half of 2025.
Boeing did not report guidance for this year, but has previously told investors it planned to generate $10-billion in annual free cash flow by 2025 or 2026, a goal widely expected to be delayed.
For the quarter, the company reported a cash burn of US$4.1-billion, slightly lower than analysts’ expectation of a US$4.26-billion cash burn, according to data compiled by LSEG.
Boeing reported a loss of US$3.86-billion in the fourth quarter due to what Mr. Ortberg called “disappointing” charges in several fixed-price defence programs. Mr. Ortberg, however, added in a letter to employees on Tuesday that Boeing was “now more pro-active and clear-eyed on the risks” to the programs.
Mr. Ortberg reiterated the company’s four-part plan to turn the business around, including a multi-year effort to fix Boeing’s culture, “perhaps the most important change we need to make.”
After banking record-high profits in the 2010s, Boeing has bled more than US$30-billion since 2019 after two fatal crashes of its best-selling 737 Max jet triggered production quality and safety concerns and worries that it had misled regulators during the plane’s certification process.
The pandemic further squeezed the company, while the mid-air panel blowout on a nearly new 737 Max last January dragged Boeing into another crisis.
The company’s defence, space & security business lost US$5.41-billion in 2024, hit by overruns on several fixed-price programs.
“We have completed deep dives on all of our challenging fixed-price development programs,” Mr. Ortberg said in the letter to employees.
Mr. Ortberg told Reuters that Boeing is working with Tesla CEO Elon Musk, a close ally of Mr. Trump, to see if the company can speed up the delivery schedule for the delayed U.S. presidential aircraft known as Air Force One.
Boeing’s commercial planes division, now focused on getting three of its models certified, has a good handle on fixing a thrust link issue uncovered on its 777X wide-body, which resumed flight tests this month, he added.
Mr. Ortberg said he is focused on stabilizing and ramping up production of Boeing’s existing airplanes and does not plan to start work on a new airplane program in the near future.
Revenue for the quarter through December fell 31 per cent to US$15.24-billion, missing analysts’ expectation of US$16.21-billion, according to LSEG data.
Quarterly adjusted loss per share was US$5.90, compared with expectations of a US$3 loss per share.
Cash burn was US$14.3-billion in 2024, compared with a cash flow of US$4.43-billion in 2023.