Boeing Gains With Earnings, Union Vote On 35% Pay Hike, Just Ahead

Boeing reports Q3 results Wednesday, while its union members are set to vote on a deal that could end the five-week-long strike. The Dow Jones manufacturer and its machinist union on Saturday reached a tentative agreement that could potentially resume factory production.  Boeing stock, lagging at its worst level in two years, has climbed to start the week.

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In its latest proposal, Boeing (BA) offered International Association of Machinists union workers a 35% wage increase over four years, up from its previous offer for a 25% raise, according to reports. Nearly 95% of the workers rejected the prior deal at the recommendation of union leaders.

Reports indicate the union is seeking a 40% raise as well as additional changes and benefits. Following the latest offer, the IAM wrote to its members, “we have received a negotiated proposal and resolution to end the strike, and it warrants presenting to the members and is worthy of your consideration.”

A simple majority will determine the outcome when the members vote, the IAM wrote.

The top earners for the union make about $51 per hour, which works out to $115,000 per year before benefits and overtime, Barron’s reported. If accepted, the new deal would push that to nearly $70 per hour by 2028, or roughly $140,000 before benefits and overtime.

The 33,000-strong worker strike that began on Sept. 13 has hobbled the Arlington, Va.-based company, which was already dealing with various quality control issues and safety concerns.

Boeing Earnings Due Wednesday

The Dow Jones plane maker on Oct. 15 secured a $10 billion credit agreement with multiple banks an filed to raise up to $25 billion in stock and debt. The company also announced plans to cut 10% of its workforce over the coming months, affecting roughly 17,000 employees.

Boeing in an Oct. 11 Q3 preview said it expects to report a GAAP loss of $9.97 per share on $17.8 billion in revenue. The company last year reported an adjusted loss of $3.26 per share on $18.1 billion in revenue.

For Wednesday’s results, FactSet predicts an adjusted loss of $10.35 per share on $18.07 billion in revenue. If Boeing meets views, year-over-year earnings would decline 218%.

Boeing also forecasts its commercial airplanes and defense divisions will incur over $5 billion in pretax earnings charges related to various delivery delays and program cancellations, in part due to the work stoppage.

Boeing Stock Rises Early Monday

BA shares inched up Tuesday and swung 3.1% higher Monday.

Boeing stock climbed off 2024 lows last week and is testing a rebound above its 50-day moving average.

Still, Boeing unraveled nearly 39% so far this year, making it the worst performer in the Dow Jones Industrial Average.

You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison

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