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Boeing (BA -2%) is trading lower following its Q3 report this morning. The aerospace giant had just issued downside guidance on October 11, so there were not a lot of surprises. Also, the focus of this report was not really on the financial results. Boeing is struggling and we think investors were focusing more on comments from new CEO Robert "Kelly" Ortberg, who took the helm on August 8. This was his first earnings call at the helm, so that piqued our interest.

• Boeing reported a loss, as expected, but it was a bit larger than expected. Revenue fell 1.5% yr/yr to $17.84 bln, which was in-line with recent guidance. Commercial Airplanes Q3 segment revenue fell 5% yr/yr to $7.44 bln. The segment was impacted by $3 bln in charges related to the 777X and 767 programs. The IAM work stoppage and higher R&D spend also impacted margins.
• In addition to guidance, Boeing announced on October 11 that it would implement a 10% workforce reduction and it announced a delay for its 777X program. With all that being known, investors were mostly focused on Ortberg's vision for the remainder of 2024 and into 2025. He conceded that trust in the company has been eroded and Boeing is saddled with too much debt. His mission is to turn this big ship in the right direction and restore Boeing to a leadership position.
• He focused on changing the culture and how it starts at the top and works its way down to the factory floor. Also, Boeing needs to stabilize the business. This has been a central focus since Ortberg took over in August. First and foremost, the IAM strike needs to end. However, it will take some time to ramp up as Boeing needs to restart factories and the supply chain, and it's much harder to turn this on than it is to turn it off.
• Looking ahead, Boeing used to provide guidance but that has been on hold for some time. Nevertheless, it did say it expects 2025 will be another year that uses cash. However, Boeing expects a significant improvement in terms of cash usage relative to 2024. Importantly, Boeing expects to exit 2025 with real momentum in the business as it returns to normal production rates. Also, Boeing has worked with supply chain partners to significantly reduce expenditures and the workforce reduction will reduce labor costs. Boeing also has decisively implemented reductions to its discretionary spending across the company.

Overall, the numbers this quarter were not as meaningful as usual given that Boeing had just guided. Also, given its struggles and headwinds (IAM stoppage, 777X delays, workforce reduction, R&D spend), investors were already bracing for a big loss in Q3. Stepping back, we liked what we heard from Ortberg on the call and the direction he wants to take Boeing. It is going to take some time, but it sounds like a turnaround somewhere in the 2026 timeframe seems feasible.