Boeing Strives for Recovery Against Airbus in Competitive Market
Boeing's Road to Recovery
The Boeing Company (NYSE: BA) has been navigating challenging skies recently, facing significant obstacles that included quality control concerns and public relations nightmares, compounded by the IAM union strike. However, as the situation stabilizes, with the return of 33,000 striking mechanics to the assembly lines, Boeing seems ready to reclaim its position in the aviation market. The company is simultaneously managing a 10% workforce reduction while sustaining a staggering backlog worth $500 billion that promises to keep operations bustling.
While Boeing was sidelined during the disruptions that allowed Airbus to dominate with a delivery of 766 aircraft, recent developments indicate that Boeing may be on the upswing again, poised to regain its competitive edge.
Boeing Surpasses Airbus in Aircraft Deliveries
In January 2025, Boeing remarkably delivered 45 new aircraft, eclipsing Airbus's 25 deliveries to 17 different customers, according to sources from Aerotime. This is a positive turnaround, marking the first instance since March of 2023 that Boeing has outperformed Airbus in plane deliveries. Notably, in this month, Boeing sent out 40 Boeing 737 MAX jets to prominent carriers like United Airlines Holdings (NASDAQ: UAL), Air Lease (NYSE: AL), and Southwest Airlines (NYSE: LUV), who operate exclusively with 737 MAX aircraft. This achievement is the first of its kind since the previous December when 105 aircraft were successfully delivered.
This surge in deliveries comes on the heels of a turbulent year that began with a serious incident involving Alaska Air (NYSE: ALK) on January 5, 2024, where a malfunction in a Boeing 737 Max 9 resulted in a dramatic mid-flight experience. Following this incident, regulatory bodies imposed a production cap on Boeing, limiting them to 38 MAX jets monthly. Among the 40 MAX planes delivered, Boeing indicated that 10 had previously been in storage, with expectations to meet production targets only later in 2025.
Q4 2024 Financial Overview
On January 20, 2025, Boeing disclosed its financial results for the fourth quarter of 2024, presenting a less-than-pleasant picture. Shareholders welcomed the news with cautious optimism, viewing it as the company’s last “kitchen sink” quarter. Boeing reported a staggering non-GAAP loss of $5.90 per share, significantly missing analyst projections which anticipated a $3.22 loss. This miss represents a gap of $2.68 from expectations.
Year-on-year revenues plummeted by 30.8%, landing at $15.24 billion and missing projections of $15.80 billion due primarily to the union work stoppage, defense program charges, and personnel-related costs. Furthermore, the operating cash flow stood at a negative $3.5 billion, with free cash flow reflecting a shortfall of $4.1 billion.
Performance Analysis by Segment
Commercial Airplanes Segment Performance
The Commercial Airplanes division faced significant hardships, witnessing revenues drop by 55% year-on-year to $4.76 billion, coupled with a daunting negative operating margin of 43.9%. Production on the 737 program resumed after the strikes concluded, while the 787 program capped the year at five planes produced monthly, with aspirations to enhance operations in South Carolina. Among positive notes, the segment accomplished 204 net orders during this quarter, including a substantial 100 orders for the 737-10 jets destined for Pegasus Airlines and 30 Boeing 787-9 planes for flydubai airlines. Furthermore, the segment delivered 57 aircraft and maintains a backlog exceeding 5,500 planes, valued at around $435 billion.
Defense, Space, and Security Segment Updates
The Defense, Space and Security segment reported a revenue decline of 20% year-on-year to $5.41 billion, resulting in a negative operating margin of 41.9%. This segment, however, did receive a shot in the arm from a new U.S. Air Force order for 15 KC-46A Tankers as well as an order from the U.S. Navy for 7 P-8A Poseidon aircraft. The backlog remains robust at $64 billion, with nearly 29% of orders attributed to international clients.
Global Services Segment Performance
The Global Services division, conversely, displayed growth, with revenues rising 6% year-on-year to $5.12 billion, showcasing a 19.5% operating margin fueled by increased commercial activity and strategic mix. Notable awards included contracts related to the U.S. Air Force's F-15 Japan Super Interceptor upgrade services.
Boeing's Made In America policies resonate strongly, with three of its manufacturing locations situated in the United States, further solidifying its standing in the domestic market. However, potential challenges loom, as tariffs imposed by recent political mandates may impact Boeing’s supply chain due to imports of aircraft parts from China.
Frequently Asked Questions
What company does the Boeing stock represent?
Boeing Company is represented by the ticker symbol NYSE: BA.
How has Boeing's performance compared to Airbus recently?
Recently, Boeing has begun to outperform Airbus in aircraft deliveries, marking a recovery after significant operational challenges.
What were Boeing's losses in Q4 2024?
Boeing recorded a non-GAAP loss of $5.90 per share in the fourth quarter of 2024.
What is Boeing's backlog worth?
Boeing's backlog is valued at approximately $500 billion, holding over 5,500 aircraft orders.
What segments does Boeing operate in?
Boeing operates in several segments, including Commercial Airplanes, Defense, Space and Security, and Global Services.
About The Author
Contact Caleb Price privately here. Or send an email with ATTN: Caleb Price as the subject to contact@investorshangout.com.
About Investors Hangout
Investors Hangout is a leading online stock forum for financial discussion and learning, offering a wide range of free tools and resources. It draws in traders of all levels, who exchange market knowledge, investigate trading tactics, and keep an eye on industry developments in real time. Featuring financial articles, stock message boards, quotes, charts, company profiles, and live news updates. Through cooperative learning and a wealth of informational resources, it helps users from novices creating their first portfolios to experts honing their techniques. Join Investors Hangout today: https://investorshangout.com/
The content of this article is based on factual, publicly available information and does not represent legal, financial, or investment advice. Investors Hangout does not offer financial advice, and the author is not a licensed financial advisor. Consult a qualified advisor before making any financial or investment decisions based on this article. This article should not be considered advice to purchase, sell, or hold any securities or other investments. If any of the material provided here is inaccurate, please contact us for corrections.