Boeing Announces Preliminary Significant Q3 Loss: Cuts 767 Freighter Program, Delays 777X EIS, Major Layoffs
By Chris Sloan
In an email to Boeing staff, Kelly Ortberg, Boeing President and Chief executive Officer, starkly admitted: “Our business is in a difficult position, and it is hard to overstate the challenges we face together. Beyond navigating our current environment, restoring our company requires tough decisions and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term.”
The company announced a multi-prong series of “clear-eyed, difficult decisions” and program updates. The headline is a roughly 10% permanent reduction in the size of the non-represented workforce, many of whom are already on furlough or partial furlough. These reductions will include executives, managers, and employees, who will begin learning their fate next week. The company did say, it will not proceed with the second wave of furloughs for now.
777X EIS now targeted for 2026; 767F production to cease in 2027
Significant program updates with wide-ranging ramifications were shared:
- The years-delayed 777X program will suffer another delay into 2026–13 years after its launch. Even before the latest throttle thrust links defects affecting the GE-9X engines grounded the type’s FAA certification TIA in late August, early launch customers CEOs from Emirates and Lufthansa had already predicted the push despite Boeing’s promises of a 2025 EIS. The 777-8 freighter will be pushed back to 2028, with both programs resulting in a pre-tax earnings charge of $2.6bn. Commercial Airplanes expects to report third-quarter revenue of $7.4bn and an operating loss of -54%.
- Boeing will halt 767 freighter production after 2027 when ICAO’s new emissions and noise rules take effect. The snake-bit KC-46A tanker production will continue. Boeing will digest a $0.4 bn pre-tax charge on the program, reflecting impacts from the IAM work stoppage.
- Ortberg reserved his harshest words for Boeing Defense, Space, and Security (BDS): “Our performance on fixed-price development programs is simply not where it needs to be. We expect substantial new losses in BDS this quarter, driven by the work stoppage on commercial derivatives, continued program challenges, and our decision to complete production on the 767 freighter.” After firing BDS CEO Ted Colbert last month, Ortberg will be providing “additional oversight of this business and these programs.” The company expects BDS to recognize pre-tax earnings charges of $2.0 billion on the T-7A, KC-46A, Commercial Crew, and MQ-25 programs. The T-7A program pre-tax charge of $0.9bn was driven by higher estimated costs on production contracts in 2026 and beyond. Defense, Space & Security expects to post a negative operating margin of 43% in the third quarter on revenue of $5.5bn.
Negative cash flow, again
In a filing with the SEC ahead of the beleaguered aerospace giant’s third earnings call on Oct. 23, the company reported it expects third-quarter revenue of $17.8bn, GAAP loss per share of ($9.97), and a negative operating cash flow of $1.3bn. Cash and investments in marketable securities totaled $10.5bn at the end of the quarter. The company is reportedly searching for additional liquidity to prop it up, which has prompted fears of its debt being downgraded to junk status.
With his short honeymoon period far back in the rearview mirror, the new Boeing CEO struck an empathetic note to the worldwide workforce. “We know these decisions will cause difficulty for you, your families, and our team, and I sincerely wish we could avoid taking them. We will navigate through this moment. We will re-focus our company, and we will restore trust with all those who depend on us.”
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