More about Boeing

Boeing is a leading aerospace company that develops, manufacturers and services commercial airplanes, defense products and space systems for customers in over 150 countries worldwide. It employs more than 140k people across the US and in more than 65 countries. 

The company is organized into 3 business units, namely Commercial Airplanes; Defense, Space and Security; and Boeing Global Services.

1. Commercial airplanes

Boeing has been a leading manufacturer of commercial jetliners for many years. It currently manufactures the 737, 747, 767, 777 and 787 families of airplanes, as well as the Boeing Business Jet range. Boeing’s ongoing efforts in new product development encompass the Boeing 787-10 Dreamliner, the 737 MAX, and the 777X. Its more than 10k commercial jetliners in service today account for almost half of the world’s total fleet. Additionally, Boeing also boasts the most comprehensive range of freighter aircraft, and approximately 90% of the world’s cargo is transported aboard Boeing planes.

In the fourth quarter of the 2021 fiscal year, operating loss in this segment decreased to US$4.5 billion from U$7.6 billion in the same quarter of the previous year. Revenue rose to US$4.8 billion (a 0.5% YoY increase) which comprised approximately 32% of the company’s total revenue.

2. Defense, Space and Security (BDS)

This Boeing segment is responsible for the design, production, modification, service and support of commercial products, satellites, human space exploration, military rotorcraft, and more. This extends to support pertinent to the KC-46 aerial refuelling saircraft, AH-64 Apache helicopter, the 702 family of satellites, the CST-100 Starliner spacecraft, and the autonomous Echo Voyager.

This segment reported an operational loss of US$255 million in the fourth quarter of the 2021 fiscal year, a deterioration from the US$502 million in earnings from operations it generated in the same quarter the year before. Revenue dropped to US$5.9 billion (a 13.5% YoY decrease), comprising 39% of the total for all segments.

3. Boeing Global Services

Boeing Global Services offers service solutions to commercial, space and defense customers, irrespective of who originally manufactured the equipment. This includes support with engineering, digital analytics, supply chain and training. 

Earnings from operations in Q4 FY 2021 went up by 180.4% YoY to $401 million, accounting for over 98% of companywide earnings from operations during the quarter. Revenue went up 14.9% YOY to $4.3 billion. This comprised almost 29% of the total for all segments.

Top Boeing shareholders

The top 10 institutional shareholders of Boeing, holding a majority ownership representing 61.48% of the outstanding saham, include:

• The Vanguard Group, Inc. – 45,066,126 shares owned (i.e., 7.47% stake)
• BlackRock Fund Advisors with 28,288,765 shares owned (i.e., 4.69% stake)
• Newport Trust Co. with 34,565,308 shares owned (i.e., 5.73% stake)
• SSgA Funds Management, Inc. – 26,416,857 shares owned (i.e., 4.38% stake)
• Capital Research & Management Co – 18,306, 455 shares owned (i.e., 3.04% stake)
• Fidelity Management & Research Co – 14,771,199 shares owned (i.e., 2.45% stake)
• Loomis, Sayles & Co. LP – 11,148,257 shares owned (i.e., 1.85% stake)     
• Capital Research & Management Co – 11,115,353 shares owned (i.e., 1.84% stake)
• Geode Capital Management LLC – 10,226,027 shares owned (i.e., 1.70% stake)
• Managed Account Advisors LLC – 5,165,902 shares owned (i.e., 0.86% stake)         

Steep losses

Boeing’s recent history is marred with tragedy with two 737 MAX crashes just four months apart in 2018 and 2019 that resulted in considerable loss of life. It is said that the accidents and the grounding cost the company almost US$20 billion in fines, legal fees and also compensation. The company is also said to have experienced 1200 cancelled orders resulting in a further indirect loss of about US$60 billion. 

In addition, it was reported that Boeing’s market capitalization plunged 58% (approximately $115 billion) since the first 737 MAX crash in Indonesia. However, US$100 billion of that also occurred to the pandemic during which the demand for flying and aircraft purchases declined substantially.

Boeing 2nd quarter results (2023)

As of July 2023, Boeing reported as follows:

• Transitioning 737 production to 38 per month; increased 787 production to four per month.
• Revenue increased to $19.8 billion primarily reflecting 136 commercial deliveries.
• Operating cash flow of $2.9 billion and free cash flow of $2.6 billion (non-GAAP); cash and marketable securities of $13.8 billion.
• Total company backlog of $440 billion, including over 4,800 commercial airplanes.
• Reaffirm guidance: $4.5-$6.5 billion of operating cash flow and $3.0-$5.0 billion of free cash flow (non-GAAP).

CFD trading in shares

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Disclaimer:
This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.