Boeing plans 737 MAX ramp-up, backs cash-flow goal
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[April 26, 2023] (Reuters)
-Boeing Co said on Wednesday that it planned to ramp up production of
its 737 MAX jets to 38 per month by year-end, while backing its annual
cash-flow goal, as it tries to reassure investors after manufacturing
problems threatened to derail deliveries.
Boeing's jet deliveries and free cash flow are being closely watched as
the company tries to recover from a series of crises since two fatal MAX
crashes in 2018 and 2019.
Reuters reported earlier this month that Boeing's schedule called for
suppliers to ramp up to 38 737 MAXs a month in June. That is seven jets
more than its current production rate.
Production of the widebody 787 Dreamliner has stabilized at three, the
planemaker said, adding that it would increase to five per month by
year-end.
Overall, Boeing reaffirmed plans to generate $3 billion to $5 billion in
free cash flow this year, as well as deliver 400 to 450 737 MAXs and 70
to 80 787 Dreamliners. Boeing shares were up 4% in trading before the
bell.
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In the first quarter, Boeing's cash burn slowed to $786 million from
$3.57 billion a year earlier, as it delivered about 27% more jets.
Planemakers usually receive a major portion of cash when they hand over
aircraft.
Margins at its defense unit were negative as it recorded a $245 million
pre-tax charge on the KC-46 tanker program, putting total pre-tax losses
on the program at about $7 billion.
Boeing reported an adjusted loss per share of $1.27, wider than analyst
expectations of a loss of $1.07 per share, as per Refinitiv data.
Revenue of $17.92 billion beat analyst expectations of $17.57 billion.
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![](../images/042623PIX/busine60.jpg)
A Boeing 737 Max aircraft during a
display at the Farnborough International Airshow, in Farnborough,
Britain, July 20, 2022. REUTERS/Peter Cziborra
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The company paid down $1.6 billion in debt, which now stands at
$55.4 billion.
Rework on the MAX "will impact the timing of deliveries over the
next several months; however, we remain confident in the operational
and financial goals we set for this year," Boeing CEO Dave Calhoun
wrote in a letter to employees.
Calhoun added in a statement that the company was "progressing
through recent supply chain disruptions."
The latest MAX manufacturing problem - which involves two brackets
that were incorrectly installed on the fuselage made by Spirit
AeroSystems - raised questions about Boeing's ability to meet its
annual targets.
Boeing had said the issue, which dates back to 2019, impacted a
"significant" number of undelivered MAX planes in production and in
storage, as well as those in service. Boeing executives are expected
to detail the scope of the problem on an investor call later in the
day.
(Reporting by Abhijith Ganapavaram in Bengaluru and Valerie Insinna
in Washington; Editing by Anil D'Silva and Nick Zieminski)
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