Boeing's loss in the third quarter grew more than Wall Street expectations as the strike by the International Association of Machinists and Aerospace Workers union weighed heavily on the troubled plane maker's results. The company's core loss came in at $10.44 per share for the September quarter, a significant increase compared to a loss of $3.26 per share the year prior.
The consensus estimated by Capital IQ forecasted a normalized per-share loss of $8.82. Revenue for the quarter edged down by 1% year over year, totaling $17.84 billion, which also missed analysts' expectations of $17.94 billion. Boeing's Chief Executive Kelly Ortberg commented, "It will take time to return Boeing to its former legacy, but with the right focus and culture, we can be an iconic company and aerospace leader once again." He further emphasized that the company would work on fundamentally changing its culture, stabilizing the business, and improving program execution while laying the groundwork for Boeing's future. Recently, Boeing announced it had reached a new and improved tentative labor deal with the IAM union aimed at ending a strike that has impacted the company for over a month.
Union members are scheduled to vote on the new proposal soon. Earlier in the month, the aircraft manufacturer projected a net loss of $9.97 per share for the third quarter due to pre-tax charges from various programs across its commercial airplanes and defense, space and security segments, compounded by the effects of the ongoing strike.
Boeing also revealed intentions to lay off approximately 10% of its workforce in the upcoming months. In the commercial airplane segment, revenue fell by 5%, totaling $7.44 billion in the third quarter. Additionally, the operational loss within this segment escalated to $4.02 billion from $687 million a year prior, impacted by previously declared pretax charges totaling $3 billion specific to the 777X and 767 programs in conjunction with the strike. Boeing managed to deliver 116 commercial planes during the quarter, slightly up from 105 delivered in the same period last year.
The company has maintained its plan to ramp up the production of its 787 Dreamliner to five aircraft per month by year-end, increasing from the current output of just four planes. In the defense, space, and security division, revenues increased slightly to $5.54 billion from $5.48 billion in the same quarter last year.
However, this segment also saw its operational loss rise to $2.38 billion from $924 million, primarily due to pretax charges of $2 billion related to specific programs. Global services revenue saw a minor improvement of 2%, reaching $4.9 billion. Boeing's overall loss from operations rose significantly to $5.76 billion, a stark contrast to an operational loss of $808 million last year.
Operating cash flow turned negative for the quarter, showing a decrease of $1.35 billion, primarily due to lower commercial widebody deliveries along with unfavorable timing in working capital. Free cash flow also turned negative, settling at $1.96 billion, which is a worsening from $310 million in negative cash flow reported last year. Price: 160.83, Change: +0.95, Percent Change: +0.59.