The company blamed the unexpected loss on “abnormal production costs” as it tried both to deliver the remaining backlog of 737 Max jets and to step up deliveries of the 787 Dreamliners. The company's production of the 787 remains below normal rates.
Boeing (BA) stock sank Friday after the company warned late Thursday of lower 737 Max airplane production and deliveries for the short term, citing production issues.
The company's troubles started with a pair of fatal 737 MAX crashes, which led to an 18-month worldwide grounding of the jet. The pandemic made matters worse, pushing commercial airlines into survival mode and cooling demand for new jets.
Boeing's aircraft deliveries will remain below historical levels over the medium term due to supply chain disruptions and BA's inability to significantly ramp up production. Boeing's profit margin remains low due to abnormal costs of aircraft and recognition of future costs.
Boeing in 2021 agreed to acknowledge liability for compensatory damages in lawsuits filed by families of the 157 people killed in the fatal Ethiopian 737 MAX crash. In February, the U.S. planemaker sought to exclude any evidence of pain and suffering that passengers may have experienced before the crash.
The pilot, Mark Forkner, was the only person to face criminal charges for flaws that resulted in two fatal crashes of one of Boeing's most important planes. A jury in Texas on Wednesday acquitted a former Boeing technical pilot, Mark A.
But the families sued, arguing that the agreement was a “sweetheart deal” made behind closed doors, and that under the Crime Victims Rights Act, they should have been allowed a seat at that table.
Key Points. Boeing's huge backlog means the company can grow simply by executing on it. Ramping up aircraft production won't be easy in the face of ongoing supply chain pressures, but those should start easing through 2023. The company needs to work through problems with fixed-price contracts in defense programs.
For much of the 20th century, Boeing's airplanes were the envy of the global aviation industry. In 2019, however, Boeing's reputation suffered immensely after two of the company's 737 MAX planes crashed within five months of each other, killing 346 people.
The company blamed the unexpected loss on “abnormal production costs” as it tried both to deliver the remaining backlog of 737 Max jets and to step up deliveries of the 787 Dreamliners.
Still, December brought Boeing's total jet deliveries in 2022 to 480, an average of 40 jets per month and up 40% on the 340 jets delivered in 2021. And Boeing's total net sales of 774 jets was up 62% vs. 479 a year earlier.
Added to enormous losses of $1.2 billion in the first quarter and $3.3 billion in the third, the fourth quarter sealed another money-losing year in 2022, Boeing's fourth straight year of annual losses. The total loss for 2022 came in at $5.1 billion, a bigger loss than the $4.3 billion in 2021.
Stock Price Forecast
The 22 analysts offering 12-month price forecasts for Boeing Co have a median target of 238.50, with a high estimate of 291.00 and a low estimate of 180.00. The median estimate represents a +8.45% increase from the last price of 219.92.
The Boeing has a volatility of 1.55 and is 2.04 times more volatile than NYSE Composite. 13 of all equities and portfolios are less risky than Boeing.
At this time, the firm appears to be overvalued. Our model approximates the value of Boeing from analyzing the firm fundamentals such as Operating Margin of 0.0014 %, return on asset of 0.0004 %, and Current Valuation of 135.9 B as well as examining its technical indicators and Probability Of Bankruptcy.
According to Moody's, Boeing's operating profit margin is $12 million to $15 million on every 737 Max it delivers.
Boeing has told a US court it was not guilty of concealing information about flight control systems on its 737 Max aircraft, which led to two crashes, killing 346 people. Flaws in the systems were found to have led to the accidents, but Boeing avoided a trial by agreeing to pay $2.5bn (£1.8bn).
In short, there's less electronic mediation between the pilot and the machinery in a Boeing aircraft. Some pilots think this gives them a better “feel” in flying the plane, while others prefer the video-gamelike quality of the electronic interface.
Its story examines the 2018 and 2019 Boeing 737 MAX incidents, where two airliners crashed killing a combined 346 people and how Boeing may have been more concerned with financial gain over the safety of their passengers.
Boeing long term debt from 2010 to 2023. Long term debt can be defined as the sum of all long term debt fields. Boeing long term debt for the quarter ending March 31, 2023 was $47.465B, a 13.93% decline year-over-year. Boeing long term debt for 2022 was $51.811B, a 8.79% decline from 2021.
At a 3-star rating, we believe Boeing stock is fairly valued when compared with our fair value estimate. Read more about Boeing's fair value estimate.
Boeing stock price stood at $220.38
According to the latest long-term forecast, Boeing price will hit $300 by the end of 2024 and then $350 by the end of 2025. Boeing will rise to $400 within the year of 2026, $450 in 2027, $500 in 2028 and $600 in 2031.
As a result, Boeing agreed to establish a $500 million fund to compensate the families of those who died, pay a fine of nearly $244 million and pay $1.77 billion in compensation to airlines.
Boeing and its top officials have avoided criminal prosecution, however, because of the settlement reached between the company and the government in January 2021. Boeing was charged with a single count of defrauding the United States to get regulators to approve the Max jet.
Both the NTSB and France's Bureau of Enquiry and Analysis agreed with the Ethiopian agency's conclusion that the design of Boeing's new flight control software that repeatedly pushed the jet's nose down — the Maneuvering Characteristics Augmentation System, or MCAS — was a major cause of the accident.