Leeham News and Analysis
There's more to real news than a news release.
There's more to real news than a news release.
Boeing takes $4.9bn charge in 3Q against 777X; reports slightly improved quarter YOY
Oct. 29, 2025, (c) Leeham News: Boeing takes $4.9bn charge on 777X in 3Q2025 earnings report. Loss from operations: $4.78bn vs $5.76bn year-over-year; net loss $5.34bn vs $6.17bn YOY. Cash flow +$1.1bn vs ($1.34bn) YOY.
More to come shortly….
@ Vincent
Here you go:
“…GAAP loss per share of ($7.14) and a core loss per share of ($7.47)”
Much, much worse than what analysts had expected 🙈
It amounts to a (20.5)% loss.
Stunning! BA generates $23.27B revenue in Q3, and a fifth of it goes down the toilet.
The margin at BCA specifically was (48.3)%.
After a deduction for “additions to property, plant and equipment”, Q3 cashflow was just $238M, with YTD (negative) cashflow being $(2.252)B.
Average revenue per delivered plane was $11.094B divided by 160 = $69.3375M.
This is a shockingly low figure, considering that 39 of those deliveries were widebodies.
The figure over at AB is generally about $82M — which is 18% higher, despite fewer widebodies in the mix.
***
Interesting line in the earnings report:
“The 737 program stabilized production at 38 per month in the quarter”
Really? Not seeing that yet in deliveries…so “stabilized” seems to have a special, non-standard meaning here.
Perhaps the front end of the line has “stabilized” at 38/pm, but the back end hasn’t…and, therefore, “production” hasn’t, either.
Long-term debt is still $44.611B.
In addition to that, there’s short-term debt (to be paid within 12 months) of $8.742B.
Cash on hand is $6.173B, and short-term investments amount to $16.811B.
So, paying off that short-term debt will put a fine hole in available assets.
Moreover, accounts payable amount to $11.732B, whereas accounts receivable stand at $3.314B.
There are also $24.364B of accrued liabilities (leases, pension contributions, etc.)
Summarizing: liquid and semi-liquid assets aren’t anywhere near enough to cover “short-term” liabilities.
Advances and progress billings in the quarter amounted to $2.065B; without those, cashflow would have been (very) negative.
New borrowings in the quarter were $128M, whereas debt repayments amounted to $721M.
google AI response:
“… raising the total program-related charges to approximately $15 billion.”
and
* Reach-forward loss” position: The program’s costs have exceeded the point where they can be recovered over the first several hundred planes. As a result, any new abnormal costs or overruns must be immediately recorded as a charge to earnings.”
and this is a funny:
Barron’s
https://www.barrons.com › articles › boeing-earnings-st…
“Boeing Stock Rises After Earnings Miss and 777x Charge”
following the link show:
“Boeing Stock Falls After Earnings Miss and 777x Charge”
The US stock market rallies upward every day, even though it’s already egregiously over-valued (current average PE ratio is 28.8; historic value is around 17).
Every news item is interpreted as a positive.
Daily warnings from US analysts about asset bubbles, liquidity issues, private equity problems, etc., are all ignored, so that the “Musical Chairs on Steroids” can go on.
BA’s stock move today fits that trend.
I wonder if this is the first example of a program being in a loss provision before EIS. The ramifications are severe. Boeing must deliver its entire accounting block with no further charges to simply “make nothing. The end of the accounting block is so far into the future that this is functionally impossible.
It’s not to “make nothing” – they must deliver their entire accounting block with no further charges to make their expected return.
“…to make their expected return”.
No…to negate the recorded reach-forward loss. In other words, just to break even. Or, as @Casey puts it: “for nothing”.
@ Casey
It would be interesting to calculate the number of 777X sales that would be required to negate the reach-forward loss for the current accounting block — using realistic pricing, and including interest corrections.
An unattainable number, I suspect.
So really what has Ortberg really changed since he took over? He really didn’t clean house like I was hoping for and really change the culture. Results so far just appear to be same ole, same ole. I mean the whole push was for him to really clean up the executives and get Boeing back on an engineering path but here we are so far with the same results, not sure what else to say, not sure with the current leadership Boeing will ever return to anywhere near what it was….sad.
“So really what has Ortberg really changed since he took over?”
Don’t over-think, what’s important is the stonk is up. A facelift for the Potemkin Village.
+1
His fans will say:
“Kelly is doing a great job turning the corner — just give him more time”
🙈
Meanwhile, rather than settling the ongoing strike in St. Louis, Kelly wants to just replace the striking workers:
-Walmart assistant: “Hello sir, how can I help you?”
-Kelly: “I’d like several boxes of ready-to-use, qualified aerospace workers, please.”
-Walmart assistant: “Certainly sir — aisle 5, at the back on the right. And we have a “2+1 free” offer this week.”
https://www.cnbc.com/2025/09/04/boeing-replacement-workers-defense-unit-strike.html
No worries. Investors don’t mind one-off charges, that’s how brokerages recommend stonks to “investors”.
Way too much focus on the earnings and stock price in the comments, which led to Boeing’s original sin. Focus should be on the people and products, which is what Ortberg has brought back. Not sexy but it’s what you need to make great airplanes.
Good grief!
> Boeing rejects union’s counteroffer; St. Louis strike continues
https://fox2now.com/news/missouri/boeing-rejects-counteroffer-union-says-st-louis-strike-continues/
A mockery of “focus on the people”.
“…it’s what you need to make great airplanes.”
You can’t make anything without income.