Boeing Earnings: A Dismal Close to 2024 As Turnaround Progress Nears

Key Morningstar Metrics for Boeing

• Fair Value Estimate: $200.00
• Morningstar Rating: ★★★
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: High

What We Thought of Boeing’s Earnings

As announced ahead of time, Boeing BA delivered another quarter full of red ink, including $4.3 billion of combined quarterly losses in its commercial and defense arms. This dragged the company to an operating loss of $10.7 billion for the year on revenue of $66.5 billion, down from $78 billion in 2023.

Why it matters: Boeing has undergone years of mishaps, mistakes, and misfortunes that would likely have brought a lesser franchise to its demise. As the company enters 2025, its commercial and defense units can turn themselves around.

• Management’s plans for 2025 progress in the commercial jet business would have the 737 and 787 assembly lines operating normally around midyear and monthly production volumes increasing by year-end. Both bode well for unlocking pent-up revenue and cash flows.
• In the defense segment, where aggressive bids on fixed-price contracts for military trainer aircraft, tankers, and replacements for the US presidential transport jet cost the company billions, we are less sure that the worst is over. The company claims it is “actively managing” the segment’s performance.

The bottom line: We have updated our forecast for near-term commercial jet deliveries and defense margins, resulting in an increase to our fair value estimate from $191 per share to $200.

Coming up: Around mid-February, Boeing will announce commercial jet deliveries for January, which will set the pace for 2025′s recovery. We expect the company to deliver 35 737s, leading to reduced inventory and the prospect of shutting down its “shadow factory” by mid-year.