Unlock Premium Data: Up to 50% Off InvestingProCLAIM SALE

Boeing shares drop on China delivery halt and cash flow concerns

Published 05/23/2024, 11:17 AM
© Reuters.
BA
-

Boeing (NYSE:BA) Co. disclosed that it has not made recent aircraft deliveries to China due to a request from the country's aviation regulator for additional certification documents.

The documents pertain to the batteries in cockpit voice recorders, which are installed on all Boeing models, including the 787 and 737 Max.

The aerospace giant acknowledged the impact of this halt on its financials, with the company's Chief Financial Officer indicating an expected hit to second-quarter cash flow.

The market reacted negatively to this news, with Boeing shares experiencing a 5.4% drop by 11:17 a.m. on the New York Stock Exchange.

Boeing's CFO remarked at the Wolfe conference that the second quarter's cash flow might be worse than the first quarter's. This is attributed to the ongoing lack of aircraft deliveries to China, a significant market for Boeing's commercial airplanes.

Furthermore, the company anticipates that the number of 787 deliveries in the second quarter will be similar to those in the first quarter, suggesting no significant improvement in the short term.

The company also faces challenges beyond the China delivery issue. Supply-chain constraints for the 787 model persist, which could further complicate Boeing's ability to increase production and deliveries.

Moreover, the CFO noted that margins in the defense segment are expected to be negative in the second quarter.

As a result of these combined factors, Boeing has projected that deliveries in the second quarter will not see a significant increase and will likely be close to the numbers seen in the first quarter.

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.