Anticipated Setback in NASA's Large Lunar Expedition Leads to Estimated $4 Billion Additional Expense for Boeing in 2025
Swap today's spacely tale under the tune, "Same tune, different verse."
In about half a decade now, Prez Trump 1.0 (v1.0) announced plans to send Yanks to the moon by 2024, chilling out in "Project Artemis." However, hitches and budget blowouts associated with Boeing's (BA -1.15%) Space Launch System (SLS), along with safety worries about the Orion space capsule, a ride-along from Lockheed Martin's (LMT -0.09%) hands, pushed that date backward to 2026, smack dab in the middle of Prez Trump 2.0's reign.
And now, we learn that NASA will flunk that 2026 deadline as well.
Time to chill, NASA's got us waiting
In 2022, if you recall, NASA rocketed its Artemis I mission, the first step for America's trip back to the moon. An SLS rocket belched out an uncrewed Orion space capsule, tearing up beyond the moon and then serenely gliding back to Earth, with a successful sploosh in the big blue.
Post splashdown, though, NASA started fretting about the charring and unpredictable crumbling of some Avcoat heat shielding cloaking Orion from reentry heat, and gave the go-ahead for a rethink. For the past two years, NASA's been mulling it over, and has finally made their move: Orion's a go, but Artemis II (the lunar orbit visit, but no landing) won't fly until 2026, and Artemis III, the real deal where astronauts start strutting their stuff on the lunar surface, is being pushed into 2027.
Delays fuse with delays
Delaying Artemis II's launch time will tack on an additional seven months, with the September 2025 launch looking more like an April 2026 voyage instead. Artemis III's delay will stretch longer, with the planned September 2026 slot becoming a mid-2027 deployment, which translates into a nine-month caper.
Importantly for shareholders, the delay will also shift any proceeds anticipated from Boeing and its space partners, including Lockheed and an army of other noteworthy space players, from 2025 into 2026, and any 2026 earnings into 2027.
What's next for Boeing stock in 2025
So, what's the coin value? In a recent opinion piece, billionaire Michael Bloomberg posited that each SLS launch costs U.S. taxpayers approximately $4 billion. (Though, I reckon the real figure skews around $4.1 billion, calculating over 20 expected SLS launches, pegs Project Artemis as a $82 billion gold mine for Boeing).
But wait, before Boeing can glorify in $82 billion from Artemis, they have to first clear Artemis II off the runway. After that, Artemis III. Then Artemis IV, and so forth. The first blow, then, will be a $4 billion blow to the estimated 2025 revenue.
Now, according to data from S&P Global Market Intelligence, experts project Boeing to rake in $86.6 billion in revenue upcoming year. As investors, then, feel free to axe that number down to $82.6 billion right now, deducting Artemis II from the equation.
The implications for Boeing's 2025 earnings are not as clear. Firstly, as Boeing's defense, space, and security branch is currently in the red, with a $3.1 billion deficit in 2022 alone and no full-year profit since 2021, it's hard to claim whether having $4 billion less income in "space" will boost or hinder profitability for the division. Secondly, Boeing may not even own its space division in 2025! Reports suggest the company's thinking of selling it off, and if labeled as a discontinued operation, its results may be eliminated from earnings from continuing operations.
What's obvious is that deferring Artemis II won't do much to improve Boeing's banking statements. As analysts predicted, Boeing's looking at nearly $1 billion in negative cash flow from operations next year. If the cash influx from Artemis II fails to arrive in time, expect that number to worsen, regardless of whether Boeing retains its space division or not.
What's up for Boeing stock beyond 2025
In the long run, delays for any Artemis launch – Artemis II, Artemis III, or Artemis X – pose even grander dangers to the well-being of Boeing's space segment, no matter who takes ownership. As Bloomberg passionately argued in his op-ed, the mounting costs and the inability to actually send people into space so far pose a strong case for cancelling the SLS program altogether and bowing to SpaceX's Starship – which has been showing some serious improvements of late.
The longer it takes to get the Artemis launches underway, the more time SpaceX has to make even more progress on Starship. The more powerful the argument becomes for axing SLS in favor of SpaceX's Starship.
If I were gingering up for a bet right now, I'd lay heavy odds against Boeing – and money on SpaceX.
In light of these delays, investors may need to adjust their expectations for Boeing's financial performance. Specifically, the anticipated earnings from Boeing and its space partners, including Lockheed Martin, could shift from 2026 to 2027 due to the delayed launch of Artemis III. (Delayed earnings impact)
With Delayed Artemis III, Boeing's anticipated earnings from the project shift from 2026 to 2027. (Switching earnings dates)