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Boeing's new CEO, Kelly Ortberg, left. Picture: MARIAN LOCKHART/BOEING/REUTERS
Boeing's new CEO, Kelly Ortberg, left. Picture: MARIAN LOCKHART/BOEING/REUTERS

Montreal — Boeing reported on Tuesday an annual loss of $11.83bn, its largest since 2020, as it grappled with problems at its commercial and defence units and the fallout from a crippling strike by US West Coast factory workers.

The loss demonstrates the challenges facing CEO Kelly Ortberg in turning around the US aeroplane maker as it cedes ground to rival Airbus in the delivery race and comes under the crosshairs of regulators and customers after a series of missteps.

Ortberg told CNBC on Tuesday the company expected to deliver 737 Max jets in the upper “30s” in January. The company delivered 17 Max jets, its strongest-selling passenger jet, in December.

Boeing shares rose 4.2% in premarket trading. Boeing did not report guidance for this year, but has previously told investors it planned to generate $10bn 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 $4.1bn, a metric closely watched by investors, slightly lower than analysts’ expectation of a $4.26bn cash burn, according to data compiled by LSEG.

Ortberg, who took the helm of the aircraft maker in August, said the company was making progress on restoring stability to its struggling production lines after a harrowing midair accident a year ago raised concerns about the safety of its jets.

Boeing 737 Max aircraft are assembled at a plant in Renton, Washington, the US, June 25 2024. Picture: JENNIFER BUCHANAN/REUTERS
Boeing 737 Max aircraft are assembled at a plant in Renton, Washington, the US, June 25 2024. Picture: JENNIFER BUCHANAN/REUTERS

Boeing reported a loss of $3.86bn in the fourth quarter due to what Ortberg called “disappointing” charges in several fixed-price defence programmes.

Ortberg, however, added in a letter to employees on Tuesday that Boeing was “now more proactive and clear-eyed on the risks” to the programmes.

Ortberg reiterated the company’s four-part plan to turn the business around, including a multiyear 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 $30bn 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 midair panel blowout on a nearly new 737 Max last January dragged Boeing into another crisis.

The company’s defence, space & security business lost $5.41-billion in 2024, hit by overruns on several fixed-price programmes.

“We have completed deep dives on all of our challenging fixed-price development programmes,” Ortberg said in the letter to employees.

Ortberg told CNBC that Boeing is working with Tesla CEO Elon Musk, a close ally of US President Donald Trump, to see if the company can speed up the delivery schedule for the delayed US presidential aircraft known as Air Force One.

Ortberg added Boeing has made progress with smoothing its supply chain and returned to an output rate of five 787 jets per month at the end of 2024, despite delays in areas like seats.

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.

Ortberg said he was focused on stabilising and ramping up production of Boeing’s existing aeroplanes and he did not plan to start work on a new aeroplane programme in the near future.

He was guarded in his message about the status of solving problems with anti-icing systems on the 737-7 and 737-10 models. The company was “still working through the testing phase, focusing on finalisation of the anti-icing design solution”, he said.

The company continued to invest in core businesses, while “streamlining our portfolio in areas that are not core to our future”, he said.

Revenue for the quarter through to end-December fell 31% to $15.24bn, missing analysts’ expectation of $16.21bn, according to LSEG data.

Quarterly adjusted loss per share was $5.90, compared with expectations of a $3 loss per share. Cash burn was $14.3bn in 2024, compared with a cash flow of $4.43bn in 2023.

Reuters

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