Boeing Says Cash Flow Is Worse Than It Thought

Boeing is still bleeding cash.

A month after announcing it burned through nearly $4 billion in the year’s first quarter, finance chief Brian West warned investors Thursday that the company is on track for a similar or worse hit this period.

He also said Boeing is unlikely to generate cash for the full year as the company deals with cascading production and supply-chain issues.

It is a bleaker picture from a month ago when the company said it expected to narrow its cash burn this quarter, and end 2024 cash-flow positive.

“We have frustrated and disappointed our customers because of some of the production and supply chain issues we are up against,” West said, speaking at a conference. He said the company should begin generating cash in the second half of the year.

Boeing is grappling with slower production of its bestselling 737 MAX jets as it roots out quality problems in the wake of January’s near-catastrophe on an Alaska Airlines flight.

Adding to the woes have been a string of unrelated issues that are both slowing production and preventing Boeing from delivering planes it has already built.

Problems range from parts shortages to the recent revelation, disclosed by Boeing, that its employees may have skipped some inspections on 787 Dreamliners and falsified inspection records. Boeing as of this week hadn’t produced a new 787 this month, according to analysts. Dozens of the planes remain parked outside the jet maker’s Everett, Wash., plant awaiting delivery.

The company’s monthly jet deliveries in April hit their lowest level since the pandemic, when the falloff in air travel brought jet production to a near standstill.

The latest issue: Boeing said this week that China has temporarily stopped taking delivery of MAX eight jets so it can review batteries included in the 25-hour cockpit voice recorder aboard the planes. U.S. and Chinese regulators are in talks about the issue and Boeing on Wednesday said it would defer to those agencies.

The company said the Federal Aviation Administration and European regulators have signed off on the system, which meets requirements of some non-U.S. air-safety agencies that voice recorders capture 25 hours of audio instead of two.

Boeing had 85 of the China-bound MAX jets in inventory at the end of 2023 and delivered 22 so far this year. Deliveries resumed this year after a yearslong freeze by Beijing since two fatal crashes of the 737 MAX 8.

The company last month tapped debt markets to raise $10 billion as investors fret over the company’s liquidity. It had ended March with $7.5 billion of cash and investments, less than half what it had at the start of the year.

Following the latest quarterly results, Moody’s Investors Service on Wednesday downgraded its rating on Boeing’s unsecured debt by one notch to Baa3, the lowest investment-grade level. Moody’s expects that cash-flow pressures will persist through 2026 and Boeing will have to issue new debt, including if it reaches a deal to acquire Spirit AeroSystems.

Boeing has said acquiring Spirit, which makes fuselages for the 737, will aid in improving quality.

West said the company is optimistic it can reach a deal with Spirit by the end of June. The talks have dragged out amid negotiations with rival Airbus about control of Spirit factories that produce parts for Airbus jets.

Boeing shares were down more than 5% in midday trading and was on pace for the largest percent decline since January.

Write to Sharon Terlep at [email protected]