After years of stumbles and weak results, Boeing Co on Wednesday said it expects to return to operational health and a more robust financial performance by the middle of this decade.
The aerospace giant — which has reported losses for the past three years — guided investors to 2025 or 2026 as when they should expect a financial performance resembling those the company posted prior to issues with the 737 MAX and the COVID-19 pandemic.
Investors cheered the outlook, sending shares up more than 7 percent at one point as Boeing signaled a more normal level of production and plane deliveries within the foreseeable future. Shares finished 2.8 percent higher at US$147.41.
“We are on the right path to return to the operational and financial strength we expect of ourselves,” Boeing chief executive officer Dave Calhoun said at the outset of the company’s first investors’ day since 2016.
Boeing’s difficult period began in October 2018 with a deadly Lion Air crash of a 737 MAX, the first of two fatal crashes of the plane that together claimed nearly 350 lives and led to a global grounding of more than a year and a half.
The company’s problems mushroomed when the COVID-19 pandemic decimated global travel beginning in 2020.
Demand has recovered strongly and the 737 MAX has been cleared for service by most leading regulators.
However, Boeing has struggled to fully exploit the improving environment due in part to supply chain problems and heavier scrutiny from US air safety regulators. These issues have forced the company to curtail production and delayed the certification of new aircraft.
The forecast released on Wednesday includes a gradual improvement in Boeing plane deliveries and production next year and in 2024, and hitting its stride after that, boosting revenues.
Boeing executive vice president Stan Deal told analysts that he expects to liquidate most of a backlog of undelivered planes by 2024, with a few spilling into 2025. This includes 787 Dreamliner planes, in addition to 737 MAX aircraft.
Deal also updated the timeframe on the certification of the 737 MAX 10, its latest version of the plane, saying the aircraft should be cleared for service by late next year or early 2024.
The company projected free cash flow, a closely watched benchmark of financial health, rising to US$3 billion to U$5 billion next year from the U$1.5 billion to US$2 billion range this year.
It said free cash flow would surge to about US$10 billion in 2024 and 2026, much closer to the US$13.6 billion Boeing notched in 2018.
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