Boeing announced its third-quarter earnings were subpar, due to a continued machinists' union strike that has suspended production and forced the company to implement cost-cutting measures. The aerospace giant reported a net loss of $6.17 billion, higher than the estimated loss of $5.49 billion predicted by analysts. Its third-quarter revenue, totaling $17.84 billion, also fell short of the expected $18.12 billion and last year's $18.10 billion.
Boeing's CEO, Kelly Ortberg, voiced the firm's determination to return to its former standing. ""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," stated Ortberg. In the face of economic pressure, Boeing is concentrating on shifting its organizational culture, stabilizing business operations, and sharpening execution efficiency.
Over the past weekend, Boeing confirmed a preliminary agreement with the union, and they are planning to vote on ratification of the new contract. Boeing's stock fell by around 1% post the release of its Q3 results and could fluctuate following the outcome of the union vote.
Previously, Boeing revealed several austerity moves, along with other efforts to bolster its finances. This includes selling a potential $25 billion in debt or stock, and striking a deal with banks for a $10 billion credit line. The ongoing machinists' strike is an estimated drain of $1.3 billion per month on the company's finances, according to Jefferies analysts.
A tumultuous year for Boeing has witnessed safety incidents, investigations by regulators and law enforcement, a CEO transition, and lackluster quarterly results, all collectively impacting the company's stock.