Commercial airliner company and defense contractor Boeing (BA 0.47%) has been at the center of several storylines this year, and not in a good way. A series of hiccups in its space exploration business, combined with a number of whistleblower leaks regarding the company's quality assurance protocols for its jetliners has sent Boeing's stock falling.
As of the time of this writing, Boeing is the second poorest-performing stock in the Dow Jones Industrial Average this year, down over 40%.
But fear not! The company may have some moves that could help turn things around. Let's dig into some recent news and explore how the company can get back on track.
Is Boeing out of orbit?
Although Boeing is mostly known for its achievements in commercial aviation, the company also has a space exploration business akin to Elon Musk's SpaceX and Jeff Bezos' Blue Origin. Unfortunately, Boeing's foray into the final frontier hasn't been met with much success.
For starters, Boeing once planned to compete with satellite internet company Starlink, a subsidiary of SpaceX. However, in late 2023, the company announced that it was abandoning this vision.
While that may not seem like a huge deal on the surface, I think in some ways it served as a prophecy. Another part of Boeing's space exploration business includes its Starliner capsules.
Earlier this year, astronauts Butch Wilmore and Suni Williams were sent into orbit on a Boeing Starliner. What initially looked like a feel-good storyline for the company has turned into something out of a science fiction thriller. Wilmore and Williams took a Starliner to the International Space Station (ISS) in June in what was supposed to be a trip lasting eight days.
After a helium leak was discovered on the Starliner, NASA deemed the capsule incapable of bringing Wilmore and Williams back to Earth. As of now, both astronauts are stuck on the ISS, and in a total blow to Boeing, it looks like Musk and SpaceX will be bringing them back sometime early next year.
On Oct. 25, The Wall Street Journal reported that Boeing may be considering a sale of its struggling space exploration business. Given the numerous setbacks it has experienced with it, selling off this segment seems reasonable.
Image source: Getty Images.
Why this could be the right move
About a month ago, Boeing announced that Ted Colbert, the CEO of the company's Defense, Space & Security business, would be leaving. To me, realigning leadership and divesting the space exploration unit are tough yet logical decisions.
At the end of the day, Boeing is still a major government defense contractor and a leader in commercial aviation. I think space exploration has mostly been a costly distraction, and selling this part of the business allows the company to simplify its strategic road map and double down on core growth drivers.
If the reporting about the sale of the space exploration business is accurate, then I think it's pretty clear the company is entering the early phases of a turnaround effort.
Divestitures are often complex, but the silver lining here is that there really are only a finite number of logical acquirers for the space business. Should Boeing sell off its space business, I'm cautiously optimistic a deal will come to fruition fairly quicky -- allowing the company to move on and get back to the basics in commercial aviation and other areas of the defense sector.
While I still see Boeing stock as a little risky and likely to experience some volatility in the near term, I think the company could be on the path to rightsizing the business and creating a leaner, more efficient enterprise in the long run.
