Sawt Falasteen - Hopes for turnaround lift Boeing shares despite huge losses

The US aviation giant reported a fourth-quarter loss of $3.9 billion as the company continued to experience a hit from a more than seven-week labor strike that shuttered two major assembly plants.

But Chief Executive Kelly Ortberg, who joined Boeing in August, said the company is making progress on a turnaround.

Company officials said they expect to lift 737 MAX production in 2025 and to clear out planes in inventory, improving the outlook for free cash flow throughout 2025.

Shares jumped nearly seven percent in mid-morning trading.

Boeing's fourth quarter loss took the company's full-year loss -- its sixth in a row -- to $11.8 billion.

The results were consistent with a January 23 profit warning in which Boeing flagged the impact of the labor strike on company operations.

The 31 percent drop in fourth-quarter revenues to $15.2 billion reflected a hit from fewer plane deliveries, which came in at barely a third of the level in the 2023 period as the labor stoppage halted output on the 737 MAX and the 777.

Boeing's performance was also marred by a troubled flight in January 2024 in which a 737 MAX flown by Alaska Airlines made an emergency landing after the plane suffered a mid-flight blowout on a window panel.

Following that incident, Boeing faced intensified scrutiny from US air regulators and slowed output.

Boeing has also continued to suffer from legacy fixed-cost defense contracts that have led to losses for the company. Boeing's profit warning flagged one-time costs of $1.7 billion in its defense, space and security division.

- Ramping up -

Ortberg told CNBC that Boeing is "actually a little ahead of where I expected" in terms of ramping up production on the 737 MAX following the strike and intensified process control checks after the Alaska Airlines incident.

Boeing has been producing the MAX at under the 38 per month authorized by the Federal Aviation Administration. Analysts view the restoration of output to 38 per month and subsequent production increases as critical to Boeing's profit outlook.

Ortberg expressed confidence in achieving higher MAX output, telling CNBC "I expect by the second half of the year, we'll have that approval, and we'll be moving to a higher production rate."

Ortberg also said he had met with Trump administration representative Elon Musk about Air Force One, the highly customized Boeing plane that flies the president.

Trump has installed Musk, the world's richest man, as an advisor on cutting government spending.

"The President wants the airplane sooner, and so we're working with Elon and the team to figure out what can we do to pull up the schedule of that aircraft," Ortberg said, speaking about replacement planes.

I.Saadi--SF-PST