Boeing (B.A) preliminary fourth quarter results were reported after hours on Thursday, estimating a whopping $3.5 billion operating cash flow loss due to the effects of the IAM (International Society of Engineers) work stoppage, alongside workforce reductions and changes to its defense business.
For the quarter, Boeing expects to report revenue of $15.2 billion versus $16.76 billion of consensus estimates per Bloomberg on a GAAP loss per share of $5.46 versus an estimated loss of $1.32. Boeing also expects to take a pre-tax charge of $1.7 billion in its defense and space business.
Boeing shares were down 1% in after-hours trade.
“Although we face near-term challenges, we took important steps to stabilize our business during the quarter including reaching an agreement with our teammates represented by IAM and conducting a successful capital raising to improve our balance sheet,” said Kelly Ortberg, Boeing president and CEO. “We also restarted 737, 767 and 777/777X production and our team remains focused on the hard work ahead of us to build a new future for Boeing.”
Boeing said the IAM strike, which ended in November with a new four-year contract, will lead to higher labor costs, resulting in pretax payments of $1.1 billion for the 777X and 767 jet programs.
Following the eight-week strike, Boeing raised the pay of IAM members by 38% over four years; combine the previous confirmation bonus of $7,000 with a lump sum payment of $5,000 for a total of $12,000 to 401(k) plans or as a cash payment; up his 401(K) game; and lowering health care premiums, among other things.
In early December Boeing lay off hundreds of workers at its base in Washington state and in California. The company had previously said it would reduce its headcount by 10%.
Earlier this month Boeing reported that it had delivered 57 aircraft in the fourth quarter: 36 737 MAX jets, 15 787 Dreamliners, and three 767 and three 777 jets. For the year Boeing said it had delivered 348 commercial jets, down a third compared to a year ago.
In November, Boeing's declining cash position threatened the company's investment credit rating, leading to announces that it would launch a $19 billion share sale to boost cash reserves. Boeing said at the end of Q4 cash and investments in marketable securities were $26.3 billion.
Pras Subramanian is a reporter for Yahoo Finance. You can follow it along X and on Instagram.
Click here for the latest stock market news and in-depth analysis, including stock-moving events
Read the latest financial and business news from Yahoo Finance