https://aviationweek.com/themes/custom/particle/dist/app-drupal/assets/awn-logo.svg
This article is published in
Aerospace Daily & Defense Report part of Aviation Week Intelligence
Network (AWIN), and is complimentary through
Jan 31, 2025. For information on becoming an AWIN Member to
access more content like this, click here.
Brian Everstine
January 23, 2025
KC-46 Credit: U.S. Air Force
Hefty cost overruns continue for Boeing’s Defense and Space business as the company has announced another $1.7 billion in charges for five of its troubled programs.
The company on Jan. 23 announced its preliminary earnings for the fourth quarter of 2024, with total revenues of $5.4 billion and an operating margin of 41.9%. The company will report its full earnings on Jan. 28, but previewed the $1.7 billion in losses on the KC-46A, T-7A, Commercial Crew, VC-25B and MQ-25.
The latest charges bring the total reach-ahead losses on the company’s fixed-price defense and space programs to $18.1 billion since 2014.
The KC-46 tanker program reported a pretax charge of $800 million, reflected in higher estimated manufacturing costs, including the impacts of the International Association of Machinists strike and subsequent agreement. The company delivered 10 tankers in all of 2024, and none in the fourth quarter. The latest charge means the company has lost $8.928 billion on the program.
Boeing is also reporting a pretax charge of $500 million on the T-7A, “primarily driven by higher estimated costs on production lots in 2026 and beyond.” This brings the total charges on the program to $3.194 billion.
The U.S. Air Force announced on Jan. 15 that it would push back production of the T-7A following extended delays throughout the program. But the service is buying four production-representative test vehicles in the meantime to keep the testing program at pace ahead of an expected initial operational capability in 2027.
Boeing, one of the world’s largest aerospace and defense companies, has announced yet another financial setback in its defense and space sector. The company disclosed a $1.7 billion loss in this division, adding to the challenges it has been facing in recent years.
This latest announcement comes as Boeing continues to grapple with the fallout from the grounding of its 737 MAX jetliner, as well as the ongoing impact of the COVID-19 pandemic on the aviation industry. The company’s defense and space division has also been affected by delays and cost overruns on key programs, such as the KC-46 tanker and the Starliner spacecraft.
Boeing’s CEO, David Calhoun, acknowledged the challenges facing the company in a statement, saying, “We are taking decisive actions to address our near-term liquidity needs, adjust our cost structure, and position our business for the future. While the overall market environment remains challenging, we have a strong foundation to build on, including our talented employees and our unmatched portfolio of products and services.”
Despite these setbacks, Boeing remains a key player in the defense and space industry, with a number of high-profile contracts and programs in its portfolio. The company is working to address its financial challenges and position itself for long-term success in these critical sectors.
Tags:
- Boeing defense and space
- Boeing losses
- Boeing financial update
- Defense and space industry news
- Aerospace company updates
- Boeing financial struggles
- Defense contracts
- Space exploration updates
- Boeing stock market news
- Aerospace industry analysis
#Boeing #Discloses #Billion #Losses #Defense #Space
Leave a Reply