Boeing Faces Challenges in Q3 2024, Announces Restructuring Plans
Boeing released its third-quarter delivery numbers and preliminary financial results for 2024, revealing a challenging period for the company. The reports, coupled with a message from CEO Kelly Ortberg to employees, indicate substantial losses and the need for significant restructuring to address ongoing issues and ensure long-term competitiveness.
Q3 Deliveries and Financial Performance
Boeing delivered a total of 116 commercial airplanes in the third quarter of 2024, bringing the year-to-date total to 291. Deliveries for defense, space, and security programs totaled 34 for the quarter and 76 for the year so far. While these figures provide a snapshot of production output, the company’s financial performance paints a more concerning picture.
Boeing announced that it expects to report a GAAP loss per share of ($9.97) and an operating cash flow of ($1.3) billion for the third quarter. The company attributed these results to charges related to specific programs within its Commercial Airplanes and Defense, Space & Security segments, as well as the impact of the International Association of Machinists and Aerospace Workers (IAM) work stoppage. Notably, the company’s cash and investments in marketable securities stood at $10.5 billion at the end of the quarter.

Challenges and Charges in Commercial Airplanes
The Commercial Airplanes segment is facing significant challenges, particularly with the 777X and 767 programs to include delays and termination of production of popular freighter models. The company announced a pre-tax earnings charge of $3.0 billion related to these programs.
- 777X Program: First delivery of the 777-9, initially planned for an earlier date, has been pushed to 2026, with the 777-8 freighter now expected in 2028. This delay, resulting in a $2.6 billion pre-tax charge, stems from developmental hurdles, a pause in flight testing, and the ongoing IAM work stoppage.
- 767 Program: Boeing plans to end production of the 767 freighter in 2027 after fulfilling existing customer orders. This decision resulted in a $0.4 billion pre-tax charge and is also attributed partly to the IAM work stoppage. Production of the 767-2C aircraft, which supports the KC-46A Tanker program, will continue.
These charges highlight the financial strain these programs are placing on the company and underscore the need for corrective actions.
Defense, Space & Security Segment Woes
Boeing’s Defense, Space & Security (BDS) segment is also grappling with significant challenges, primarily stemming from fixed-price development programs. The Boeing CEO acknowledged the segment’s underperformance and announced substantial losses for the quarter. These losses are attributed to the work stoppage on commercial derivatives, ongoing program challenges, and the decision to cease 767 freighter production.
The BDS segment reported a $2.0 billion pre-tax earnings charge driven by issues on the T-7A, KC-46A, Commercial Crew, and MQ-25 programs. Specifically, the T-7A program incurred a $0.9 billion charge due to increased cost estimates for production contracts from 2026 onward. The KC-46A program faced a $0.7 billion charge, attributed to the 767 freighter production halt and IAM work stoppage impacts.
Restructuring Plans and Workforce Reduction
In response to these challenges, Boeing announced a 10% reduction in its workforce over the coming months. This reduction will affect executives, managers, and employees across the company. CEO Kelly Ortberg emphasized that these cuts are necessary to align the company’s workforce with its financial reality and a more focused set of priorities. The decision to reduce the workforce also means the company will not proceed with another round of furloughs.
Focus on the Future
Despite the current difficulties, CEO Kelly Ortberg expressed confidence in Boeing’s ability to recover. He emphasized the company’s commitment to safety, quality, and customer delivery. The planned restructuring and workforce reduction are strategic decisions aimed at ensuring Boeing’s long-term competitiveness. The company aims to streamline its operations, improve efficiency, and focus on core areas of strength. Kelly Ortberg stressed the importance of transparency and support for employees during this transition.
Key Takeaways
- Boeing’s Q3 2024 performance reveals significant financial challenges and operational hurdles in both its commercial and defense segments.
- The company is taking decisive action to address these issues, including a 10% workforce reduction and restructuring efforts.
- The 777X program faces further delays, while production of the 767 freighter will cease in 2027.
- The BDS segment faces significant losses due to program challenges and the work stoppage.
- Despite the current difficulties, Boeing’s leadership is committed to navigating these challenges and restoring the company to a position of strength.
It is important to note that the information presented is based on preliminary reports and statements from the company. Actual financial results and the impact of restructuring plans may vary. It’s advisable to refer to official company filings and announcements for the most up-to-date and accurate information. This summary is meant to provide an educational overview of the current state of the aerospace industry and it is not financial advice or recommendation.