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Bond Market News
Boeing Expects Cash Burn in 2024
May 24, 2024
Boeing provided a bleak update with its finance chief saying that the aerospace major will burn rather than generate cash in 2024, with deliveries not increasing in the second quarter. He now expects Boeing’s full-year free cashflows to be negative, in part due to delays in deliveries. This is in contrast to March’s outlook for a positive cash generation. Due to increased regulatory scrutiny, factory disruptions and delay in deliveries to China, Boeing’s Q2 cash burn is expected to be in-line, or worse than the $3.9bn seen in Q1, the CFO said. Fears of a probable rating downgrade have also emerged with S&P’s Ben Tsocanos saying, “this year would be below our financial expectations for the rating and this is incrementally worse”.
Boeing’s shares fell 7.6% to close at $172.21. Its bonds were trading weaker with its 5.15% 2030s down 0.8 points to 95.3, yielding 6.1%.
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