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Boeing warns of layoffs amid COVID-19, 737 Max woes

Yahoo Finance’s Emily McCormick and Kristin Myers discuss Boeing's quarterly earnings as the company warns of layoffs.

Video Transcript

KRISTIN MYERS: Let's talk about plane makers right now. Looking over at Boeing, down over 3% right now. We're joined by Yahoo Finance's Emily McCormick to go through how that stock is faring, as I mentioned down over 3% after reporting improved earnings. Hey, Emily.

EMILY MCCORMICK: Hi, Kristin, and as you mentioned, Boeing actually did report better-than-feared results on the top and bottom lines for the third quarter, but the company is still showing signs of strain due to the pandemic, especially when it comes to their workforce. Now just running through these numbers here, we saw third-quarter operating cash burn at $4.82 billion. That was slightly less than the outflow of $4.92 billion that had been expected. And we did see revenue of $14.1 billion, down 29% over last year. And this was the sixth straight quarter of a sales decline of more than 20% for Boeing.

Now we saw commercial aircraft-- the-- that unit still the laggard here in these results. We saw commercial plane deliveries totaling just 28 in the third quarter. That dropped by more than half compared to last year. And we've also seen cancellations continue to be elevated for Boeing over the course of 2020. Now the company did add that it continues to be, quote, "significantly impacted" by both COVID-19 and the issues related to the ongoing global grounding of that 737 MAX jet, so that, of course, a big factor here in the weakness that we've seen on the delivery side of Boeing's results.

Now I also want to highlight that Boeing's Defense, Space, and Security unit also showed some shakiness this past quarter. Sales there unexpectedly fell over last year by more than 2%. The segment was thought to be more insulated from fallout due to the coronavirus pandemic but again still seeing a little bit of weakness even in that part of the business. Now in terms of the outlook, Boeing did say this morning that it expects passenger revenue to return to 2019 levels in about three years, so again, pointing to an extended recovery here for Boeing as well as for the airlines that actually serve as its customers.

Now finally I want to highlight the big announcement that came alongside this morning's earnings results, and that was that Boeing intends to cut even more jobs over the next year or so, the company saying it's looking at a reduction of about 7,000 additional employees. And in all, it expects its workforce to comprise 130,000 employees by the end of 2021. Now just as a refresher, the company's headcount had been 160,000 before the pandemic, so there have been a series of job cuts as well as attrition that has been announced at Boeing over the course of the year.

Now I do want to take a look at those shares-- again, one of the many stocks in the Dow that is lower on the day. Those shares trading lower by 3% intraday. They are down about 50% year to date, Kristin.

KRISTIN MYERS: All right. Thanks so much, Emily.