Boeing came close to running out of cash in 4th quarter

By Scott Hamilton

Jan. 23, 2025, © Leeham News: The Boeing Co. nearly ran out of cash in the fourth quarter, the company said today as it previewed earnings that will be announced next week.

Boeing’s fourth-quarter cash flow was negative at $3.5bn, in part due to a strike that overlapped the third and fourth quarters.

Fourth quarter revenue will only be $15.2bn, reflecting the 53-day strike by its largest union, the IAM 751 in Washington and Oregon. The strike began on September 13. A new contract was approved on October 31. Employees returned to work by November 12, but retraining and the Christmas-New Year holidays delayed returning to full production.

Boeing said it lost $5.46 per share, or nearly $3.4bn, in the quarter. The company raised $25bn in cash and securities in the quarter. It entered the fourth quarter with $10bn in cash and short-term investments. It had $26.3bn at year-end. These figures illustrate how precarious Boeing’s position had become during the fourth quarter.

$1.1bn in new charges

Boeing took a $900m charge against the 777X and 767 programs. Of this, $900m “reflects higher estimated labor costs associated with finalizing the IAM agreement and will be incurred over the next several years,” Boeing said. “The company still anticipates the first delivery of the 777-9 in 2026. Commercial Airplanes expects to report fourth-quarter revenue of $4.8 billion and operating margin of (43.9)%.”

The Defense, Space & Security unit will have pre-tax earnings charges of $1.7bn on the KC-46A, T-7A, Commercial Crew (Starliner), VC-25B (Air Force One), and MQ-25 programs. “The KC-46A program pre-tax charge of $0.8bn reflects higher estimated manufacturing costs, including impacts of the IAM work stoppage and agreement,” Boeing said in today’s statement. “The T-7A program pre-tax charge of $0.5bn was primarily driven by higher estimated costs on production lots in 2026 and beyond. Defense, Space & Security expects to report fourth-quarter revenue of $5.4 billion and operating margin of (41.9)%.”

74 Comments on “Boeing came close to running out of cash in 4th quarter

  1. This ought to be an interesting spin on the cash flow…highlighting $3.5B in “operating cash” loss. Trying to do the math…but the entire cash burn looks to be $9.17B. Where is the other $5.67B cash burn coming from…inventory build / strike costs?

      • @Pedro

        Im just simply taking the net of cash from Q3 2024 of $10.4B and Q4 2024 of 26.3B ($16B gain) less $25B investment which comes out to about a $9B loss.

        Also wondering whether some of this was advance financing to Spirit to keep it afloat. The full detail should come out in the quarterly earnings.

        Where I am really getting at is whether this money is being held as an asset or truly down the drain. Unless I read otherwise…I see $9B of $25B raised down the drain.

        • Most of the writeoffs have a large future component
          ‘ T-7A program pre-tax charge of $0.5bn was primarily driven by higher estimated costs on production lots in *2026 and beyond.*
          “[777X and 767 programs]..$900m “reflects higher estimated labor costs associated with finalizing the IAM agreement and will be incurred *over the next several years*..”

          Remember Boeing uses program accounting over time not a yearly ‘cash book’

          • It doesn’t mean such losses wouldn’t have an impact on cash flow, only the cash drain takes place in future periods.

          • @Pedro

            Accelerated asset depreciations like tooling that would have been written off over time are now brought forward.

          • Thanks. I went back and had a second look:

            In BA’s 3Q24 SEC filing:
            “We expect to end production of the 767 freighter program in 2027. As a result of this decision, the accounting quantity for the 767 program was decreased by 9 units during the three months ended September 30, 2024. Impacts of this decision, as well as the ongoing IAM 751 work stoppage and contract negotiations, and higher costs driven by ongoing factory disruption resulted in a $0.4 billion reach-forward loss on the 767 freighter program in the third quarter of 2024.”

            In BA’s 4Q24 preliminary result announcement:
            BDS recognized charges “of $1.7 b on the KC-46A, T-7A, Commercial Crew, VC-25B, and MQ-25 programs.”

            BCA recognized charges “of $1.1b on the 777X and 767 programs. The 777X program pre-tax charge of $0.9 billion reflects higher estimated labor costs associated with finalizing the IAM agreement and will be incurred over the next several years.”

  2. Back to a seriously moving target. At least mid year if not into the 3rd quarter before we begin to see stability in the MAX builds. That will be the hugely relevant point if they can get up past 30 a month.

    I continue to think Boeing would have been best off declaring Chapter 11 and start from scratch.

    I don’t see how going further into already horribly debt does any good.

    Once you go Chapter 11, all sorts of loans are there at very good interest rates.

    • Its not horrible debt . Its not unusual now to be very highly geared which Wall St loves
      American Airlines total debt (Incl lease labilities)on the balance sheet as of September 2024 : $65.75 Billion
      United Airlines $30.5 Bill
      Delta is $24.3 bill
      Southwest $9 bill
      GE Aero $21 bill

    • Chapter 11 is not intended to be a fraud scheme where companies just easily get rid of their debts.

      Please be aware that it is about declaring bankruptcy, where the current owners, ie shareholders would basically lose their assets. Typically, an indicator for such a situation being around the corner would be if the Boeing share becomes a penny stock and it is far from that.

      • I get that but if you are in debt for the next 15 years? Can’t develop product?

        Its certainly a definition of Bankrupt and the never getting out of debt and sinking is a factor in the filing.

  3. BCA
    revenue $4.8 billion
    operating margin of -43.9%

    BDS
    revenue $5.4 billion
    operating margin of -41.9%

    BDS fulfills as a ‘balance’ when BCA’s revenue is down but the end result is less than satisfactory. All those “new” programs of the last decade or so are losing $$$

  4. Not being a financial expert, and with financing often made as opaque as possible, I focus on the fundamentals.

    Both BCA and BDS are burdened by massive legacy debts, outdated product portfolios, and competitors that appear far more capable.

    For decades, Boeing benefited from being a favorite of Washington and Congress, leveraging its status as a key exporter. But now, Boeing seems exhausted, relying on significant government intervention to survive and restructure—largely because U.S. aerospace remains a strategic priority.

    Perhaps it’s time to split Boeing into separate Defense and Civil divisions, allowing companies like Lockheed Martin, Northrop Grumman, Raytheon, and GE to (re)enter the civil aerospace market. A superior U.S.-made narrow-body aircraft is long overdue.

    • Pardon the analogy…but what i have observed recently is that the debt hole has been dug with a backhoe and any recovery will be filled with a teaspoon.

      Put another way…a healthy quarter of deliveries “might” lead to a $1B gain in cash position. Hard to say what that number is since it has been so long. That takes a lot of work and nothing severe going wrong. This explosion of debt has been due to catastrophic events that are largely self-inflicted. No government intervention can prevent a company from tripping over itself.

      The “$1B” per quarter I gave above is a guess…but there is an upper bound. Pricing is locked (and borderline breakeven with penalties) and unlike a lot of businesses Boeing cannot just make more product. Very easy to destroy value and very difficult to earn it back.

  5. I saw this morning that some Aerospace Companies (and maybe some hedge funds) are lining up to take – Jeppeson Navigation – off Boeing’s hands for 6 – 8 Billion. When you need the money, you need the money…

    • The question with the assets is are they a core aspect or are they just aviation associated?

      GE was the poster child for collecting odds and ends (granted many not core to anything)

      So is a Small Jeppensen division worth the attention and investment that field requires or do you cash it in? I vote for cashing it in.

      Boeing was going to co venture on an APU at one point. Lots of APUs out there.

      Some aspects you can’t sell (space) some like Satellites are a small part and again a distraction and take resources.

      You could sell the defense divisions off. Some I would and some no. Are Helicopters really core to Boeing? Army is going the way of a V-22 type (which is coming up on end of production due to lack of sales). But Boeing did not get that contract.

      I think the T-7A is a core aspect. It is directly aviation and it keep engineers at work with design and the digital build systems that are key to the future.

      The P-8 is and the E-7 is going to be highly successful enterprises much like KC-135.

      If you are not going Chapter 11 you need to eliminate the close to 100 billion in real debt.

    • The problem with a distressed company selling bits of itself off to raise cash is that – by definition – they’re selling bits of the business that raise revenue leaving the rotten core more dominant than ever in the remainder. And as the company is desparate for cash, it’s hard to get a good price; everyone knows you’ll have to cave early in negotiations.

      It can be a very slippery slope.

      • I am going to seriously disagree with that.

        While Boeing management culture is rotten, the aircraft business itself is not. Its a sweet thing to be a duopoly and Boeing out survived all US Mfgs to get there and there is only one other that has succeeded (in spades now).

        The business if invested in is not rotten.

        The other aspect is, people are going to bid on the bits and pieces based on how viable or what it does for their bossiness. Who the buyers for Jepensen are, have not followed it, but CAE would be one entity that might have a serious interest.

        If its a viable business you will get a number of bidders and when bids go in, the price goes up.

        If they are biding Boeing is not their concern, its what Jepensen would do for them.

        Same thing for Boeing Satellite group. Its not a big player, but the product line would fit in with others, and they would bid for it.

        The Manned Capsule? No one is going to buy that unless its LM for next to nothing.
        Artemis? Contract it out to Musk.

        Each entity is desperate on its merits or lack of them.

        • Yeah, Boeing is in “a sweet spot”! Between a rock and a hard place?? 😂

          Also I believe to take advantage of being in “a sweet spot” in a duopoly market is no different than the mentality of those C-suite in McDowell before it “bought Boeing using Boeing’s own cash”!

          Do anyone here see what’s going to happen in next twenty years?

          What if one can fly from say Tokyo to the US in four hours or less?

          Boeing is not interested in decarbonization, there’s no game changer anymore, where they can see is little more than how can it afford to pay its bills when they’re due.

        • GE has come back a bit as they’ve spun-off and sold-off a great percentage of the company. If BA can get fair value for an entity at this time, I think they have to go for it and concentrate on -7, -10 and the -X9. This is an extreme situation those “CEOs” have put this great company in.

  6. We now know how close BA was on the brink:
    ‘Boeing said Oct. 15 that it has a separate new credit agreement in place for $10 billion, giving it “additional short-term access to liquidity as we navigate through a challenging environment.”

  7. “Four passengers and two crew members seriously injured after United Airlines flight makes emergency return landing in Lagos due to a “technical issue”.

    UA613, a Boeing 787-8 Dreamliner, initially bound for Washington Dulles International Airport, had 245 passengers, eight flight attendants, and three pilots on board. […]

    Onboard the aircraft were 245 passengers and 11 crew members. While all individuals disembarked safely, four passengers and two crew members sustained serious injuries, while 27 passengers and five crew members suffered minor injuries.”
    https://x.com/aviationbrk/status/1882843072255398056

    • Amazing, how someone can sustain serious injuries and be released a few hours later, which is exactly what happened to all the six patients.
      Trying to sensationalize a
      turbulence event; ehh .
      DL175 comes to mind !!

      • Haha. Per CNN:

        “One passenger allegedly hit his head on the ceiling and briefly lost consciousness.”

        Using the same logic of yours, flight AS 1282 is a nothing burger because there’s no “serious injuries”? 😭🤯

        • Furthermore, as reported by CNN:

          “The same aircraft, flying from Lagos to Washington’s Dulles International Airport had previously been diverted on Tuesday, according to FlightRadar. Altitude data from that flight showed a rapid descent of 1,000 feet about 89 minutes into the flight. It is unclear whether the diversions of UA613 are related.”

          • Do you know what’s the cause of the incident or the cause of death? Have investigators released any of their reports?
            At worse, it can be the fault of the engine, supplied by an American company. Yeah, it seems many American companies have gone downhill. 🙄
            You sound sooo desperate!

            A Boeing 737-800 had a bird strike, it crashed and almost two hundred died.

            Not that long ago, it’s touted as the safest plane ever. Lol.

      • Depends upon their health insurance as to the severity of their injuries or illness. That is a serious statement.

      • Modern Medicine really can give miraculous healing.
        Really shouldn’t dramatize someone’s medical condition when a slight concussion doesn’t warrant one.

      • I quoted word by word from the source listed. Where did you see there’s such “implication”? Elaborate.

        If you have further issue, go directly to the source.

        Oops. Poster here knows better than UAL? LOL

        “United Airlines said… the cause was not severe turbulence and attributed the jolt to an unspecified technical issue.”

        P.S. Even the site you cited, VFTW, said:

        “According to United Airlines,

        Flight UA613 from Lagos to Washington D.C. returned to Lagos to address a technical issue. […]”

        OMG this is too funny! Such a massive failure!🤦‍♂️

        • You know you are glaringly obvi US?

          Or as my mom said, you know you are too old to be cute anymore!

          • What would my mother tell you? Hahahaha

            She knows how to deal with those who can’t restrain themselves.

        • Nice try Pablo,
          Doing everything possible to pin it on Boeing;
          really quite embarrassing!
          ☺️☺️☺️.

          • You named a source that directly contradicted your claim! 🤣

            “Nice try… really quite embarrassing!”

            True words for you!!

            If I were you, I would… since I’m not shameless. How come some posters here never accept they were… just plain wrong?

      • “United Airlines said the aircraft returned to Lagos to “address a technical issue.” The airline said the sudden descent was *not* caused by turbulence, and that it is “working with aviation authorities in the U.S. and Nigeria to understand the cause.””

        “According to data available on FlightRadar, the same aircraft was diverted Tuesday during a flight from Lagos to Washington, D.C., after rapidly dropping some 1,000 feet about 89 minutes into the flight.”

        https://www.kcrg.com/2025/01/27/nearly-40-injured-united-airlines-international-flight-after-boeing-plane-suddenly-descends/

    • If not for Pedro, we would not know what was going on in the Aviation world.

      Leeham just does not cover it the way he does.

      Or as they said in WWII, Thank god for the Fletchers

      • Jeez. Poster here accepts neither constraints nor restraints. Why don’t you start your own blog, huh??

  8. I would like to hear what our old buddy Dave “Cash-Flow” Calhoun has to say about all this. I assume he would blame the IAM, vendors, Putin, Muilenberg, yada yada yada …
    He liked to pay lip service to responsibility and accountability while taking none himself.
    Of course, he grew up in the GE deflect the blame and shoot the messenger culture, so what more could we expect?

    • The cruel reality is that for all the bemoaning about the extraordinary cost of a new aircraft program ~$15B…Boeing just (pardon my language) pissed through $10B in one quarter to accomplish what exactly?

  9. By the end of this decade, the A321 would contribute ~80% of the A320 family aircraft Airbus delivers.

      • All I can see is entering at $10bn cash/STI, with ($3.5bn) burn during the Q. OK, STI was threadbare, well shy of historicals, but $10bn cash is a fairly standard cash position for Boeing in recent times and I don’t see how a ($3.5bn) burn off a $10bn start put them close to running out during the Q.

        What am I missing?

        • $10 billion is petty cash to others

          “Nvidia sheds almost $600 billion in market cap, biggest one-day loss in U.S. history”
          “The selloff, which hit much of the U.S. tech sector, was sparked by concerns about increased competition from Chinese AI lab DeepSeek.”

        • See Casey’s comments above

          > This ought to be an interesting spin on the cash flow…highlighting $3.5B in “operating cash” loss. Trying to do the math…but the entire cash burn looks to be $9.17B.

          > Im just simply taking the net of cash from Q3 2024 of $10.4B and Q4 2024 of 26.3B ($16B gain) less $25B investment which comes out to about a $9B loss.

          IIRC BA CFO(?) talked about they have to maintain $10b cash at min to keep the company running.

        • @Woody:

          Read this carefully:

          The company raised $25bn in cash and securities in the quarter. It entered the fourth quarter with $10bn in cash and short-term investments. It had $26.3bn at year-end. These figures illustrate how precarious Boeing’s position had become during the fourth quarter.

  10. “Jeju Air flight 2216 was scheduled from Bangkok to Muan, departing Bangkok at 02:29 local time (19:29 UTC). The flight approached Muan approximately 4 hours 30 minutes after departure. The last ADS-B message received from the aircraft occurred at 23:58:50 UTC with the aircraft located at 34.95966, 126.38426 at an altitude of 500 feet approaching Runway 1 at Muan. Based on visual evidence (see video below, viewer discretion advised) and the altitude and vertical rate data received by Flightradar24, we believe that the final ADS-B messages received represent preparation for a possible flypast of the airport. A flypast is often performed to visually confirm that the landing gear is either down or not prior to making a decision on next steps. […]”
    https://www.flightradar24.com/blog/jeju-air-2216-muan/

    Confirmation of my est of the last known attitude of Jeju 2216. Can it fly ten miles further?? Cough cough.

    • So, they pull up the gear and do a fly past to prove what?

      For the uninformed public, the statement was pure nonsense.

      Rarely do commercial aircraft do fly bys. If and when you do, its with a clear communications with the tower. You don’t do a fly by to confirm the gear is up, you do it for down and you suspect you are getting a bad signal it is down.

      So, no coms, no gear down, this is part of some of the worst reporting I have ever seen.

      What is relevant is speed details. 173 mph. 500 feet. You might get a 1000 feet glide out of that. Assumes the gear is UP. So, do the math.

      2.9 miles per minute in the air. So now we are at 11-12 miles.

      Report is that bird remnants found in both engines. Smaller birds, 1 lb (guess that would be 1/2 Killo or a tad less).

      Engines as part of the test process have a bird thrown into them and continue to run.

      As the aircraft would have crashed with no power, and they flew for 4 minutes and did a 180 deg turn, they had substantial power.

      It may not have been 100% power on both engines or varying degrees of reduced power on one or both. As a clean 737 can fly on one engine, 50% thrust total would keep you in the air. Doing a 180 deg turn cost energy, so by default, even to maintain altitude and do a 180, you are going to need (have) over 50% thrust.

      Forensics will be able to give a ballpark idea of how damaged the engines were or were not but it is going to take substantial time to assess that.

      Hopefully some of the memory chips from the engines, engine controls, possibly AC and some other systems will have had power and provide data.

      What I can tell you is that if your power is iffy, you never try to turn back to an airport. You are trained not to (yes people do drop their training but these are far better trained pilots via Sim ops.

      They either maintained their altitude or increased it some post the elecrial system drop out. Again to do so takes at least 50% thrust. As I recall, one engine out you can get 300 FPM positive climb on one engine (737). It has to be clean configuration (gear and flaps up).

      Right now we do not even have a post elecrial power loss flight profile though it will be a tear drop out past the airport. If they angled off one way or the other they could do a 180 without crossing back. That does not change the times and distances involved. It would affect how much thrust was needed, a gentle 180 cost less energy than a sharp 180 deg turn.

      This is a quote from a generally well founded source. As the wind conditions were flat calm, landing into the so called wind is irrelevant decision wise. The is no wind to consider. Its an example of just throwing stuff out the same as the so called fly by.

      “The six-page report did not go beyond factual details and several questions remain, such as why the jet abandoned its first landing attempt and then turned around to land on the same runway in the opposite direction – a rare manoeuvre as pilots prefer to land into the wind, which helps with stability and braking.”

      • Trans,

        “So, they pull up the gear and do a fly past to prove what?”

        Where did you pull that from? Lol.

        Do you know which direction the aircraft was flying at that moment? 🤦‍♂️

  11. And the mess isn’t anywhere near over yet:

    “Boeing’s (NYSE:BA) projected Q4 2024 loss of $5.46 per share reflects significant challenges the company is facing, particularly considering the analysts’ expectations of a loss of $1.84 per share. The company anticipates revenue of $15.2 billion, which is also below the market expectations of $16.27 billion.”

    “…as of now, InvestingPro’s fair value tool indicates a 24.8% downside for Boeing stock.”

    https://uk.investing.com/analysis/boeing-earnings-with-most-bad-news-priced-in-better-guidance-may-spark-breakout-200615306

    • Bloomberg reports:

      “Flight 613, Boeing Co. 787-8, was enroute from Lagos, Nigeria, to Washington Dulles International Airport on Jan. 24 when the movement occurred, forcing the flight to return, the NTSB said Monday in a post on social media platform X. United on Friday described the problem as a “technical issue,” and said the flight *did not involve severe turbulence*.”

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