Companies
Boeing tumbles as wider-than-expected loss outweighs revenue beat
Boeing shares tumbled 10.7% on Tuesday after a wider-than-expected adjusted loss and production setbacks outweighed a revenue beat, record backlogs and a major defense win.
Quick Read
- Boeing shares tumbled 10.7% on Tuesday after its adjusted loss proved wider than analysts expected, even though revenue beat forecasts.
- Costs, delivery mix and production delays in commercial airplanes outweighed growth in defense and services.
- Boeing reported record backlogs and stronger cash flow, and its chief executive said financial uncertainty is narrowing.
- The stock now trades 33.3% below its 52-week high.
What did Boeing report?
Boeing Co. (NYSE: BA) reported third-quarter results on Tuesday. Revenue rose from a year earlier and topped the consensus, the average analyst forecast.
Why it matters: The loss was the problem. Boeing's core loss per share was wider than analysts expected. That is an adjusted measure that strips out certain one-off items.
Under standard accounting rules, Boeing still posted a loss per share. But it swung to an operating profit from a large operating loss a year earlier, when it took a big charge on a new widebody jet program.
Operating margin, the profit the core business keeps from each dollar of sales, turned positive from deeply negative.
Why did the shares fall?
The stock tumbled 10.7% to close at $168.18, down from $188.31 the day before. The drop cut Boeing's market value by $16 billion.
The weakness sat in the commercial airplanes unit. Its revenue fell and it ran at an operating loss. Boeing blamed a less favorable mix of deliveries, higher expected costs from future production-rate changes and higher supply-chain cost estimates.
Chief financial officer Jesus Malave Jr. said a delay in steadying output of its best-selling single-aisle jet would leave deliveries short of the year's target. He added that a wing-parts supplier disrupted production lines, though shipments have resumed.
The fall stood out on a firm day for stocks. The S&P 500 rose 0.6%, and the industrial sector fund (XLI) gained 0.6%.
What went right for Boeing?
Other parts of the business grew. Defense, Space & Security revenue rose and its operating margin widened, helped by a gain from selling HRL Laboratories.
The defense unit also won the Navy's selection for the F/A-XX fighter. Chief executive Kelly Ortberg said the company “scored a generational win.” Global Services revenue rose as well.
Commercial airplanes and defense each ended the quarter with a record backlog, meaning orders taken but not yet delivered. Boeing also pointed to stronger cash flow. Ortberg said in a television interview that financial uncertainty across the company is narrowing.
Was the selloff an overreaction?
Some commentators think it may have been. TV host Jim Cramer said in a post on X: “Boeing got the kitchen sink today and people don't see that.”
A kitchen-sink quarter is one in which management packs disappointing news and targets into a single report. It can weigh on a stock in the short run but may ease pressure later.
The longer record is weaker. The shares now trade 33.3% below their 52-week high of $252.15, the highest price of the past year. A $1,000 stake bought a year ago was worth $754 at Tuesday's close.
In after-hours trading, which takes place after the regular session closes, the stock edged up 0.2% to $168.50.
What could come next for the shares?
What’s next: Boeing said it expects to steady single-aisle output at its target rate next year. It also kept its plan for delivery of its new widebody jet in 2027.
Broader events may matter more for the whole market. The Federal Reserve announces its interest-rate decision at 2:00 p.m. ET on Wednesday, Oct. 28. The chair holds a press conference at 2:30 p.m. An estimate of third-quarter economic growth arrives on Oct. 29 at 8:30 a.m.
For readers
What it could mean for you: People who own Boeing shares directly felt this report in full, with no other holdings to cushion it. A single stock carries all of the company's own news, good and bad. For these owners, the price could hinge on whether Boeing steadies single-aisle jet production next year, as management said it expects. Updates on supplier problems, delivery counts, the defense backlog and cash flow may also move the shares. Owners of broad index funds feel Boeing only in proportion to its weight.
Questions and answers
Why did Boeing stock fall after its third-quarter earnings?
Boeing's adjusted loss per share was wider than analysts expected, and its commercial airplanes unit ran at an operating loss. Management also said deliveries would fall short of the year's target.
Did Boeing beat revenue expectations?
Yes. Revenue rose from a year earlier and topped the analyst consensus, with growth in defense and global services.
What does a kitchen-sink quarter mean?
It is a quarter in which a company puts disappointing results and targets into one report. TV host Jim Cramer described Boeing's report this way and argued the selloff may have been premature.
What did Boeing say about jet production?
Boeing said it is working to steady output of its best-selling single-aisle jet and expects to reach its target rate next year. It kept its plan for delivery of its new widebody jet in 2027.
The numbers
| Boeing (BA) price | $168.18 |
|---|---|
| Boeing (BA) change | −10.69% |
| Boeing (BA) market value | $130 billion |
| Boeing (BA) 52-week high | $252.15 |
| S&P 500 change | +0.60% |
| 10-year Treasury yield | 4.99% |
Tuesday’s close
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