Boeing (BA +3%) is seeing a positive trading day after releasing its Q4 report. The stock has been on an upward trajectory since hitting a low of $137.03 in mid-November. Despite issuing downside guidance on January 23, Boeing's report revealed its 14th consecutive quarterly loss, which was largely anticipated by investors.
- Q4 revenue declined by 30.8% year-over-year to $15.24 billion, aligning with the previous guidance of $15.2 billion. The quarter was affected by an IAM work stoppage, charges for defense programs, and costs from workforce reductions. Investors were prepared for these challenges, so the stock wasn't heavily impacted.
- Investors are encouraged by positive developments in production. The 737 program resumed after a labor strike, with plans to increase production rates. In Q4, 36 airplanes were delivered, including 18 in December. By January, 33 airplanes were delivered, with expectations to exceed 38 per month later this year.
- Boeing is prioritizing quality alongside quantity. Post-strike, the focus was on training and stabilizing the production line, which is showing benefits. Boeing has ample inventory and does not foresee supply chain constraints as it ramps up 737 production.
- The 787 program ended the year with a production rate of five per month and plans to expand in South Carolina. The 777X program resumed FAA certification flight testing in January, with the first 777-9 delivery expected in 2026. Boeing is ensuring the 787 production system is stable before increasing rates.
Overall, investors seem to be more focused on production improvements than on current financial results. There is optimism for a turnaround, as demand for air travel remains strong. Although 2025 might pose financial challenges, Boeing aims to exit the year with significant business momentum as production rates normalize.
