The planemaker's CFO confirmed that it won't be able to rebuild its coffers for a while
Boeing $BA (BA) presented earnings Wednesday, and they were not good; the company lost $6 billion on $17 billion in revenue amid an ongoing machinists’ strike that is bringing operations to a crawl. But maybe the most important number in the planemaker’s business update is its free cash flow: $2 billion leaked from Boeing’s coffers, and that number will not turn positive for all of 2025.
“As it pertains to 2025, 2025 free cash flow will be significantly better than 2024,” CFO Brian West said on Boeing’s earnings call. “And we expect the first half to be a cash usage and the second half to turn positive and then build real momentum as we exit the year and return to more stable production rates.”
An analyst asked whether that translated to Boeing continuing to bleed cash for all of next year. West said, “yes.”
Boeing investors are focused heavily on cash flow because the company has had to break open its piggy bank a few times this year. First it was because a Federal Aviation Administration-imposed production slowdown following a January door plug blowout made it harder to get paid for the fewer airplanes going out the door. Then came the machinists’ strike.
Though Boeing said its third-quarter results were impacted by the strike, the numbers only cover its business up to September 30. That misses out on more than three weeks of the strike, which started in mid-September and by some estimates is costing the company $50 million of its precious cash a day. The $2 billion in negative cash flow this quarter compares to $3 billion in positive cash flow that the company saw in all of 2023.
The company already borrowed $10 billion this year to stabilize its cash pile, its treasury has already shrunk by $10.1 billion through September. Boeing has plans to raise as much as $35 billion, but that will be a more difficult process since it has to figure out how to do that without threatening its barely-there investment-grade credit rating. A drop into junk-bond territory would make any turnaround efforts much more expensive and precarious.
“We are in active engagement with the rating agencies, and it’s a constructive dialogue, and they help inform the plan that we have,” West said on the call, adding that “it’s all on the priority to protect our investment grade.”
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