Investing

Boeing Is the Worst Managed Company of 2019 (Updated)

Douglas A. McIntyre

Published: December 17, 2019 7:08 am

Last Updated: January 30, 2020 12:06 pm

Several of America’s largest companies have posted poor results, based on both their stock prices and financial reports. Some of these are perennial losers, trailing other companies in their sectors for years. Some of these have even done damage to their reputations that could take years to recover. 24/7 Wall St. examined these troubled public corporations as part of a larger review of the performance of the S&P 500. One company stood out as clearly the worst of the list, and several others trailed closely.

Boeing Co.’s (NYSE: BA) is 24/7 Wall St.’s worst managed company of 2019. Its executives have ruined the company’s reputation and its ability to compete effectively with rival Airbus, at least in the short term. Two of its 737 Max 8 planes crashed, killing 346 people. The plane has not returned to commercial service, and it will not until early next year, at best. Management was accused of dodging signs of software problems, and some middle management apparently had knowledge of their existence. Boeing just announced it will stop production of the 737 Max in January. The shutdown could go well beyond next month. Dennis Muilenburg, chief executive officer since 2015, was brutalized at congressional hearings and then stripped of his title as board chair. It is not clear that he still will be at Boeing next year. Boeing shares are up less than 2%, among the worst of the Dow components. The Dow is up 21.04% this year to 28,235.89.

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The following have performed almost as badly as Boeing.

International Business Machines Corp. (NYSE: IBM) continues to be the least successful of the big tech companies. It posted another poor quarter. Its foray into cloud computing has left it in the second tier as the sector roars forward. Revenue dipped another 3.9% in the most recent quarter to $18 billion. Earnings dropped 36% to $1.87 per share. IBM’s multiyear slide continues. Its share price improvement trails the Dow Jones industrial average this year and is well short of Microsoft and Apple.

Ford Motor Co. (NYSE: F) is among the least successful large car companies in the world. Its shares are up 14% this year, well below the gains of the major market indexes. Ford’s sales have been terrible in China, the largest global market. In the United States, it relies heavily on one vehicle, the F-150 pickup, for sales. It has lagged behind most of its global rivals, with the introduction of the new Mustang Mach-E electric truck only showing that Ford’s electric vehicle arsenal is small.

Shares of FedEx Corp. (NYSE: FDX) recently reached a multiyear low. Several Wall Street analysts have turned their backs on the company. Its stock is down 4% this year, while rival UPS has posted a 21% gain. FedEx, according to experts and investors, has fallen behind Amazon and UPS in the delivery wars. FedEx ended its ground shipping deal with Amazon, which has one of the best reputations of American companies. FedEx’s most recent earnings are more proof of that. It also faces a more aggressive U.S. Postal Service. The shipping industry has become much more crowded, largely because of Amazon. FedEx is being handicapped as the loser.

3M Co.’s (NYSE: MMM) collection of seemingly unrelated businesses has made it among the worst-performing stocks of any large American company this year. Its shares are down 10% this year, which makes it one of only three Dow stocks that are lower. Revenue fell another 2% last quarter. 3M also lowered its earnings estimates for the balance of the year. The market has little or no confidence in its restructuring plans.

Standard & Poor’s recently downgraded L Brands Inc. (NYSE: LB). Is it any wonder? Its stock is off 32% so far this year. The retailer is coming apart at the seams, an ongoing trend. The net loss last quarter was $252 million, compared to a net loss of $43 million in the same period of last year. Revenue of its flagship brand, Victoria’s Secret, continued to slide, down 8% last quarter on a comparable store basis. L Brands has not made any convincing case that it has a viable plan to turn around.

Under Armour Inc. (NYSE: UAA) was one of the hottest apparel brands for years. It ran into another wall in 2019 after stumbling for several years. Revenue fell marginally in the most recent quarter, and per-share earnings were higher at $0.23 than last year’s $0.17. Yet, the company revised forecasts downward for the rest of the year. CEO Kevin Plank will become executive board chair just as Under Armour continues to hit rough patches. The stock collapsed early in the year, and it is up only 6% year to date. To make matters worse, the company has disclosed an investigation into its accounting practices.