The Boeing Company (BA): Strike, Losses and the Pivot to Autonomous Defense

Immediate development: strike meets a damaged P&L#

A labor stoppage that began in early August 2025 and has idled more than 3,200 machinists at Boeing’s St. Louis defense facilities intersects with a balance sheet and income statement still recovering from prior crises. The operational hit comes as Boeing — [BA] — reported an FY2024 net loss of $11.82 billion on $66.52 billion of revenue and finished the year with negative shareholders’ equity of -$3.91 billion (FY2024 filings, accepted 2025-02-03). That combination—an active multi‑month production disruption in mission‑critical defense lines and a materially negative equity base—creates a near‑term delivery and liquidity tension that investors should treat as both operational and structural.

The strike is concentrated on St. Louis lines producing fighters and other defense platforms. With specialized work and an estimated three‑to‑six‑month training window for replacements, the stoppage threatens Q3/Q4 2025 defense deliveries and pushes revenue recognition into 2026 for affected programs. Against a FY2024 backdrop of steep margin compression and negative EBITDA, the labor disruption materially raises the probability that defense revenue will slide sequentially in late 2025 and that Boeing will have to accelerate contingency spending to preserve program schedules and customer trust (company filings and Monexa reporting, Aug–Sept 2025).

Earnings and cash‑flow reality: deep losses, negative operating cash in 2024#

Boeing’s FY2024 results show pronounced deterioration in operating profitability and cash generation. Revenue fell to $66.52B in 2024 from $77.79B in 2023 (-14.49% YoY). Gross profit swung from $7.71B in 2023 to - $1.96B in 2024, and operating income collapsed to - $10.79B. The company reported EBITDA of - $7.65B, producing an EBITDA margin of -11.50% on FY2024 revenue (FY2024 financial statements, filed 2025-02-03).

Net income followed the operating deterioration: Boeing’s net loss widened by $9.60B YoY from - $2.22B in 2023 to - $11.82B in 2024—a swing of roughly -432% in reported net income. On a cash‑flow basis, Boeing recorded net cash used in operating activities of - $12.08B in 2024 and free cash flow of - $14.40B, both of which underline the acute working‑capital and delivery‑timing pressures driving the company’s near‑term liquidity profile (FY2024 cash flow statement).

Table 1 below summarizes the income‑statement trend across the past four fiscal years to make the scale of the reversal explicit.

Source: Boeing FY2021–FY2024 financial statements (filed through Feb 2025).

The quality of earnings is further questioned by cash‑flow dynamics. Boeing moved from positive operating cash flow in 2023 (net cash provided by operating activities of $5.96B) to a - $12.08B operating cash outflow in 2024, driven largely by a - $8.77B change in working capital and delivery timing. The 2024 free cash flow deficit was financed via net cash from financing activities of $25.21B, reflecting capital markets access but increasing reliance on financing to bridge operating shortfalls.

Balance sheet: negative equity, elevated leverage and mixed liquidity#

Boeing is large in scale but displays structural stress on its balance sheet. At year‑end 2024, total assets were $156.36B against total liabilities of $160.28B, producing shareholders’ equity of - $3.91B. Total debt stood at $54.19B while cash and short‑term investments were $26.28B, yielding net debt of $27.91B if one nets only cash‑and‑short‑term‑investments, or net debt of $40.39B if one nets only cash and equivalents; the dataset reports net debt of $40.39B (which appears to use cash & cash equivalents of $13.8B). These definitional differences explain some variability in published leverage metrics and must be clarified when comparing ratios across reports.

Using year‑end balances, the company’s current ratio is 128.00B / 97.08B = 1.32x (total current assets over total current liabilities). That compares with a TTM current ratio figure reported elsewhere of ~1.23x—reflecting timing differences between quarter/T TM aggregates and the fiscal year snapshot. The negative shareholders’ equity produces counterintuitive returns‑based ratios: dividing a negative equity base into a negative net income generates a positive ROE metric, but that number is of limited economic meaning and can mislead readers if not qualified. Using FY2024 net income of - $11.82B and average shareholders’ equity between 2023 (‑ $17.23B) and 2024 (‑ $3.91B), average equity ≈ - $10.57B, which yields an ROE of -11.82 / -10.57 = +111.9%—a mathematical artifact caused by negative equity rather than a genuine sign of financial health.

Table 2: Balance sheet and liquidity (selected items, FY2024)

Source: Boeing FY2024 balance sheet (filed 2025-02-03) and market data.

Because Boeing carries a large base of progress payments, customer deposits and program‑specific receivables, the composition of current assets is important: liquidity exists, but concentrated working‑capital swings tied to delivery timing can quickly invert reported cash flows into outflows when program schedules slip.

Where the strike hits hardest: defense revenue, program cadence and supplier risk#

Boeing’s defense portfolio—fighters, rotorcraft, space and classified systems—represents roughly one‑third of company revenue on recent periods. Using FY2024 revenue of $66.52B, a one‑third share equates to about $22 billion of revenue exposed to the St. Louis manufacturing footprint. The strike’s immediate effect is to idle specialized lines (F‑15, F/A‑18) and to risk downstream supplier cadence that underpins those deliveries.

The operational mechanics matter: defense contracts typically have narrow windows for delivery, and missed schedules can trigger liquidated damages, rework and costly remediation. Training replacement machinists for fighter assembly is not interchangeable with commodity hiring—estimates of three to six months for productive training imply a sustained reduction in output rather than a short, recoverable pause. Given Boeing’s negative operating cash flow in 2024, incremental wage, overtime and training costs to bridge the gap will press margins further in the quarters where these expenses are recognized.

Commercial production strength is a partial mitigating factor. Boeing continues to convert large commercial orders into multi‑year delivery schedules: notable 2025 deals (e.g., lessor and airline orders) expand backlog and secure future cash flow. But converting commercial backlog into immediate cash is limited by production capacity and program sequencing: commercial lines cannot be ramped faster without supplier and labor bandwidth. The net effect is a timing mismatch—commercial momentum supports medium‑term revenue visibility, but the defense strike produces immediate earnings and margin risk.

Strategic pivot and product pipeline: MQ‑28 and autonomous systems#

Boeing is redirecting R&D resources toward higher‑margin, software‑driven defense platforms—most visibly the MQ‑28 Ghost Bat and Collaborative Combat Aircraft concepts. The MQ‑28 program has cleared operational milestones and is moving Block 2 into production, with armed tests planned in the late 2025–early 2026 window (company program updates and Monexa reporting). That trajectory shifts Boeing’s addressable post‑sale revenue mix toward recurring software, sensor and sustainment contracts if the company successfully secures production lots and follow‑on upgrades.

Quantitatively, R&D spend remains material: Boeing reported $3.81B of research and development expense in FY2024. The payoff for that investment depends on converting demonstrations into production awards, and then monetizing lifecycle services—an approach that can raise long‑run margins but requires near‑term capital and execution consistency. In a capital‑constrained environment with negative free cash flow, the company must prioritize which programs receive funding and which are deferred, a balancing act made more difficult by labor and delivery disruptions in defense manufacturing.

Legal and regulatory overhang: 737 MAX adjudication remains a tail risk#

The 737 MAX legal and regulatory chapter is not closed. Judicial scrutiny of the Department of Justice’s proposed Non‑Prosecution Agreement has left open the shape and timing of final remediation, potential additional penalties, and, crucially, whether an independent monitor will be required. That uncertainty matters for Boeing’s cost of compliance, potential cash‑settlement timing and reputational risk with airline and government customers. Any substantive modification to the DOJ package could affect Boeing’s cash‑flow profile and its ability to tender new awards or certifications at pace.

Competitive context: scale plus execution risk#

Boeing retains structural advantages—scale in commercial narrowbodies with the 737 family, a broad defense portfolio, and a global aftermarket services network. Yet those advantages are currently counterbalanced by execution risk. Airbus remains a direct competitor in commercial airframes and benefits from steady production in some models, while defense incumbents (Lockheed Martin, Northrop Grumman) contest advanced systems and autonomous teaming. In a market increasingly defined by software, sustainment and autonomous capability, Boeing’s challenge is to pair product‑level innovation (MQ‑28 and CCAs) with reliable, labor‑stable manufacturing and supply‑chain execution.

Forward signals: what the numbers say about possible trajectories#

Several measurable signals will determine Boeing’s path in the next 6–12 months. First, the duration of the St. Louis strike and progress in onboarding replacements will map directly to late‑2025 defense revenue and margin recognition. Second, quarterly operating cash flow trends will indicate whether working‑capital pressures are easing or intensifying; improvements in operating cash flow would be the strongest sign of stabilization. Third, legal outcomes tied to the 737 MAX (settlement mechanics, monitoring obligations) will determine cash‑flow timing and regulatory friction.

Analyst estimates baked into forward numbers show an expectation of eventual profitability restoration: consensus models embedded in the dataset move Boeing back to positive EPS around 2026–2027, with estimated EPS of 3.38 in 2026 and rising thereafter. Those outcomes require a combination of restored defense production, sustained MAX deliveries, moderation of working‑capital swings and controlled R&D investment in autonomous programs.

Key takeaways#

Boeing is navigating a challenging compound stress test: an active, multi‑month defense strike that disrupts delivery cadence at the same time the company is still working through the financial effects of prior crises. FY2024 showed a $11.82B net loss, -11.5% EBITDA margin, negative shareholders' equity of -$3.91B and operating cash outflow of -$12.08B, all of which amplify the operational risk from the St. Louis stoppage. Commercial order momentum provides medium‑term revenue visibility but does not remove the near‑term hit to earnings and cash flow that defense delays produce.

Boeing’s pivot toward autonomous systems (MQ‑28 and CCAs) offers a credible pathway to higher‑margin, recurring revenue if the company can convert demonstrations into production buys and sustainment contracts. However, that strategic upside is contingent on restoring manufacturing stability, resolving labor disputes, and clearing legal/regulatory overhangs tied to the MAX saga.

What this means for investors#

Investors should treat Boeing’s situation as a combination of operational execution risk and strategic optionality. The company’s medium‑term recovery story depends on three linked outcomes: (1) rapid resolution or manageable mitigation of the St. Louis labor stoppage to protect defense delivery cadence; (2) sustained commercial deliveries that convert backlog into cash; and (3) foreseeable legal/regulatory outcomes that limit unanticipated cash drains. Monitor operating cash flow, defense segment delivery schedules, and the terms/timing of legal settlements as primary indicators of de‑risking.

Finally, numerically oriented readers should note definitional sensitivities in published leverage metrics: variations between cash & cash equivalents vs cash & short‑term investments and between year‑end and TTM aggregates materially affect headline ratios (current ratio, net debt/EBITDA, EV/EBITDA) and should be normalized before intercompany comparisons.

Conclusion#

Boeing sits at a classic crossroads: a near‑term operational shock that constrains earnings and cash flow colliding with strategic investments that could reshape long‑term margins. The company’s scale and product pipeline remain real assets, but in 2025 the balance between execution and aspiration is fragile. The immediate priority for all stakeholders—management, customers, suppliers and investors—will be restoring production reliability in defense while keeping commercial deliveries on track and containing legal and working‑capital volatility. The coming quarters will show whether Boeing can translate its strategic bets into durable returns or whether execution gaps will prolong balance‑sheet repair and margin recovery.

All financial figures cited are taken from Boeing fiscal year filings through FY2024 (accepted 2025‑02‑03) and internal program reporting (Aug–Sept 2025). Where timing definitions differ (TTM vs fiscal year end), the text notes the basis for each calculation.