Boeing has recorded $1.5 billion of Starliner forward losses, says Jefferies

By James Rogers

NASA's decision to bring Starliner astronauts Butch Wilmore and Suni Williams home on a SpaceX spacecraft represents 'another hit' for Boeing, says Jefferies

As the saga of Boeing Co.'s Starliner spacecraft continues, the aerospace company has recorded more than $1 billion in forward losses, according to analyst firm Jefferies.

The latest twist in the Starliner saga came Saturday, when NASA said that astronauts Butch Wilmore and Suni Williams will return to Earth on a SpaceX capsule next February, after the Starliner spacecraft that took them to the International Space Station was beset with problems. The Starliner capsule will return uncrewed, NASA said.

The flight test was the first crewed Starliner mission, marking an important milestone for Boeing (BA) and NASA. But following its delayed launch in June, Starliner has been dogged with helium leaks and thruster issues, prompting NASA to choose Elon Musk-led SpaceX to bring Wilmore and Williams back to Earth. The capsule was initially expected to be docked at the orbiting space lab for at least eight days before bringing the two astronauts home. They have now been there for more than 70 days.

Related: NASA astronauts to return to earth with Elon Musk's SpaceX, Boeing Starliner to come back empty

"In 2014, BA was awarded a $4.2BB contract by NASA under the Commercial Crew contract to transport astronauts to/from the ISS on the Starliner spacecraft that would be launched on a ULA Atlas V rocket," Jefferies analyst Sheila Kahyaoglu wrote in a note Monday. "From the start, BA's offering has been delayed, w/ SpaceX launching piloted flights back in May 2020 w/ BA yet to start crewed non-test missions."

To date, Boeing has recorded around $1.5 billion in forward losses, according to Jefferies. "This comes as BA completed the Uncrewed Orbital Flight test in Q2 2022 as it worked toward the Crewed Flight Test that was planned for July 2023 and finally launched in June 2024, but has been altered by the empty return," she wrote. "NASA's FY25 budget currently includes funding for Boeing's CTS-1, the first crewed non-test flight."

NASA's decision to turn to SpaceX and return Starliner to Earth uncrewed represents "another hit" for the Boeing Defense, Space & Security division, Kahyaoglu said, contributing to an estimated $2 billion free-cash-flow usage for BDS in 2024 and an estimated $1.4 billion in 2025, which likely poses risk, Jefferies added.

Also read: Boeing Starliner saga: Do NASA astronauts get overtime pay in space?

Boeing shares fell 0.8% Monday, while the S&P 500 SPX was down 0.3%.

Boeing was not part of Saturday's NASA press conference. On Saturday, Boeing Space posted on social media that NASA decided to "autonomously return" Starliner from the International Space Station. "We continue to focus, first and foremost, on the safety of the crew and spacecraft," Boeing said in a statement. "We are executing the mission as determined by NASA, and we are preparing the spacecraft for a safe and successful uncrewed return."

Mark Perez, chief investments officer at Linqto, a private investing platform that gives non-institutional investors access to private early-stage companies, told MarketWatch that Boeing will get past the current Starliner woes. "Do I think it's the end for Boeing for space? No," he said. "There's so much embedded history there."

Related: SpaceX set for historic Polaris Dawn launch, first commercial spacewalk

Linqto's portfolio includes a number of large and small private space companies, including Axiom Space, Space Perspective and Quantum Space.

Boeing has a longstanding relationship with the International Space Station, and in 2010 officially turned over the on-orbit segment of the space lab to NASA. The company continues to provide engineering support services to the ISS, as well as processing for laboratory experiment racks. Boeing also partners with NASA for the space agency's massive Space Launch System, described as "the only rocket capable of carrying crew and large cargo to deep space in a single launch."

SpaceX's Crew-9 mission is scheduled to depart for the ISS no earlier than Sept. 24 and is expected to bring Wilmore and Williams home in February.

Related: Bitcoin entrepreneur teams with SpaceX to command first manned spaceflight over Earth's poles

In stark contrast to Boeing's Starliner woes, SpaceX has maintained a busy schedule of both crewed and uncrewed launches. In May 2020, the private space company made its first crewed test flight to the International Space Station atop a Falcon 9 rocket, marking the first time that U.S. astronauts launched to space from American soil since 2011. Since then, the company's Crew Dragon spacecraft has flown several manned missions to the ISS.

SpaceX is targeting Aug. 27 at 3:38 am Eastern for the first launch of the private Polaris Program's three human spaceflights. The debut mission, Polaris Dawn, will see the company's first commercial spacewalk.

Launching atop a SpaceX Falcon 9 rocket, Polaris Dawn will transport four astronauts and 36 experiments into space and spend up to five days in orbit.

-James Rogers

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08-26-24 1605ET

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