Boeing’s defense division is expected to incur $1.7 billion in losses when the company publishes its fourth-quarter earnings report next month, bringing the division’s yearly losses to nearly $5 billion.

In a preliminary earnings report Thursday, Boeing said it expects to recognize $1.7 billion in pretax earnings charges on its KC-46A, T-7A, Commercial Crew, VC-25 B, and MQ-25 programs.

In a statement, Boeing acknowledged the devastating fourth-quarter losses but asserted that the company is back on track after restarting production and raising capital.

“Although we face near-term challenges, we took important steps to stabilize our business during the quarter including reaching an agreement with our IAM-represented teammates and conducting a successful capital raise to improve our balance sheet,” Boeing CEO Kelly Ortberg wrote. “We also restarted 737, 767 and 777/777X production and our team remains focused on the hard work ahead to build a new future for Boeing.”

The KC-46A caused the most losses for Boeing’s defense department, costing the company around $800 million after significant delays and higher-than-expected production costs. Similar issues plagued Boeing’s T-7A program, contributing $500 million of the $1.7 billion in losses. The rest of Boeing’s projected fourth-quarter losses came from the VC-25B and MQ-25 programs.

The projected fourth-quarter losses bring Boeing’s total year-end charges up to nearly $5 billion for its defense division, constituting the largest loss ever for the unit.

Overall, Boeing projects to report a $4 billion loss in the fourth quarter, with a $5.46 drop per share. 

Boeing’s projected fourth-quarter losses are the bitter cherry on top of a difficult year for the defense contractor. After facing significant supply chain issues and a midair accident in the first part of the year, Boeing then had to contend with a seven-week strike by the International Association of Machinists and Aerospace Workers. The strike halted production on many of Boeing’s most popular models like the 737 and 777.

The company eventually relented to worker demands, greatly increasing wages and benefits for many. Boeing announced layoffs shortly after, cutting 17,000 jobs, 10% of its workforce, mostly in nondefense divisions.

• Vaughn Cockayne can be reached at vcockayne@washingtontimes.com.