Kelly Ortberg speaks at the 14th annual U.S. Chamber Of Commerce Foundation Aviation Summit in downtown Washington, D.C.
Kris Tripplaar | SIPPL Sipa USA | AP
Boeing CEO Kelly Ortberg on Tuesday said the company is making progress on its recovery, including by focusing on core businesses and stabilizing production, as he faces investors antsy for answers after the plane maker posted its sixth consecutive annual loss.
Ortberg said the company’s 737 Max deliveries will likely reach the “upper 30s” this month, up from 17 in December.
“We’re a little ahead of where I expected,” he told CNBC’s “Squawk on the Street.” He said Boeing will likely turn cash-flow positive in the second half of the year, after burning through more than $14 billion in 2024.
Boeing’s shares were up more than 4% in early afternoon trading after Ortberg’s comments.
Ortberg, a longtime aerospace executive whom Boeing hired out of retirement over the summer, said the company is also focused on fixing the company’s culture.
The company is expected it to sell off units like its Jeppesen navigation business, which the CEO confirmed is a candidate during an earnings call on Tuesday.
“There are some areas where we can streamline the organization or we may be better off of focusing our energy elsewhere and we’ll be actioning those over the coming months and year,” Ortberg said on the call. “I think if I give you any guidance, think of it as more pruning the portfolio, not cutting down the tree.”
Boeing lost $3.86 billion in the last three months of 2024, taking about $3 billion in charges in its commercial aircraft unit and its defense and space business spanning aircraft from the Boeing 767 to the KC-46 tanker to the long-delayed pair of 747s that are set to serve as new Air Force One planes. Revenue was down 31% from the same period last year to $15.2 billion.
Boeing’s results were impacted, as expected, by a nearly two-month machinist strike that idled work on most of its aircraft and lengthened delivery delays to customers, which pay for the bulk of their planes when they’re received. Boeing said it burned through about $3.5 billion in the fourth quarter, a difficult end to what was supposed to be a turnaround year. The company expects to have a similar cash use in the first quarter.
Boeing had released preliminary results last week showing a wider loss and lower revenue than analysts expected.
The company’s annual loss totaled $11.83 billion, its largest since 2020, when it was grappling with a grounding of its bestselling plane, the 737 Max, after two fatal crashes and the Covid-19 pandemic.
“While it was a challenging year, we are seeing encouraging signs of progress as we work together to turn around our company,” Ortberg said in a staff memo.
Its defense unit’s revenue fell 20% to $5.4 billion for the quarter, and it took $1.7 billion in pretax charges.
“While charges for the quarter in BDS are disappointing, we have completed deep dives on all of our challenging fixed-price development programs,” Ortberg said in the memo. “We are now more proactive and clear-eyed on the risks.”
Ortberg said in the CNBC interview on Tuesday that Boeing is discussing with President Donald Trump‘s adviser Elon Musk how to deliver the already delayed Air Force One aircraft earlier and reduce costs in the program, which is more than $2 billion over budget. Musk’s company SpaceX is also a Boeing competitor.
Revenue for the commercial aircraft unit dropped 55% to $4.76 billion.
Here’s what the company reported compared with what Wall Street analysts surveyed by LSEG were expecting:
- Loss per share: $5.90 adjusted vs. $3.00 expected
- Revenue: $15.24 billion vs. expected $16.21 billion
Boeing lost $3.86 billion, or $5.46 per share in the fourth quarter, compared with a loss of $30 million, or a loss of 4 cents a share, in the same period a year ago. Adjusting for impacts of the strike and charges, the company lost $5.90 per share.
The company last posted a profit in 2018. In addition to the crashes and Covid, it has faced a host of manufacturing defects and cost overruns, and early last year, a near-catastrophic midair blowout of a door panel on a nearly new Max 9 jetliner as it climbed out of Portland, Oregon.
After the strike ended in November, Boeing resumed production of its 737 Max aircraft in December, and earlier this month, it restarted test flights of its 777X aircraft, which haven’t yet been certified by the FAA. Boeing is also working to certify the Max 7 and Max 10 aircraft, the smallest and largest models in the single-aisle Max family.
A Boeing banner and an F-15EX jet fighter during the Farnborough International Airshow, on 22nd July 2024, at Farnborough, England.
Richard Baker | In Pictures | Getty Images
While airline CEOs have largely supported Ortberg, key Boeing customers are still logging the effects of the delivery delays.
American Airlines said over the weekend it made further cuts to its schedule because of late deliveries of new Boeing 787 Dreamliners, which it also planned to use to launch a premium-seat-heavy configuration to capitalize on a consumer shift toward pricier, roomier seats.
It plans to suspend service between Miami and Paris in June and July, and cut down on frequencies between Dallas Fort Worth International Airport and New York’s John F. Kennedy International to London in May, as well as from Dallas to Honolulu in June.
“We’ll be proactively reaching out to our impacted customers to offer alternate travel arrangements and remain committed to mitigating the impact of these Boeing delays while continuing to offer a comprehensive global network,” American said in a statement.
Meanwhile, the CEO of European budget airline Ryanair, Michael O’Leary, said Monday that the company had to cut its passenger traffic goal for the year because of “frustrating” Boeing delivery delays.
— CNBC’s Phil LeBeau contributed to this report.
Correction: Boeing had a loss of $30 million in the fourth quarter a year earlier. An earlier version misstated the figure.
