Trouble-hit aerospace company Boeing (BA) saw its share price drop dramatically on Thursday following more bad news. The company has been affected by safety concerns and slow deliveries this year, leading to CFO Brian West confirming that its Q2 results are likely to be poorer than anticipated.
Boeing To Hit Negative Cashflow In 2024
He said that BA had to burn its way through $3.9bn of its cash reserves in Q1 as it was affected by heavier operating costs as well as revenue being lowered through making fewer plane deliveries. The result could be that Boeing ends up in a negative cash situation in 2024.
Earlier cash projections had suggested that BA would have positive cash generation this year, probably in the range of single-digit billions. However, the latest update from West turned this around and pointed to negative cash generation for 2024. He said that “we have frustrated and disappointed our customers because of some of the production supply chain issues that we’re up against”.
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This is despite the projection for positive cashflow in the second half of 2024, with more plane deliveries expected in this time, while operating costs should also be reduced. It’s not expected to be enough to overcome the poor start to the year though.
Boeing’s safety concerns began in early January when an incident on an Alaska Airlines flight using a 737 MAX saw the fuselage blow out. Manufacturing processes have been changed since then, with added quality control checks now in place. This situation has led to S&P lowering the company’s rating to BBB.
