Boeing Co executives revised up their estimates for 737 MAX jet deliveries this year, warning that supply chain problems have limited the company’s ability to ramp up production, despite “significant” demand for the jets.
The comments on the revenue path highlight the challenges facing Boeing, despite a substantial improvement in the company’s cash flow levels in the quarter through June.
The company’s share price retreated from daily highs, closing with gains of 0.1% at $156.09. Boeing said it aims to stabilize production of the 737 jetliner at 31 units per month, despite pressing supply chain problems.
The company expects supply chain issues, as well as uncertainties in China, to keep deliveries of the MAX aircraft this year near the “low 400s,” versus previous estimates of about 500 aircraft deliveries.
“We’re still experiencing real constraints,” Brian West, Boeing’s chief financial officer, told investors.
West said the company has increased its presence in its supplier infrastructure and has organized teams of experts to address supply chain volatility in a range of sectors, including engines, raw materials and microcircuits.
Some analysts are unsure whether the measures taken by Boeing will help solve the problems that have plagued the company’s production line.
“Despite the fact that the worst is probably over for Boeing, we will see better and less surprising opportunities in the aerospace sector,” analysts at Vertical Research Partners wrote in a note after a Boeing earnings update.
Supply chain concerns dominated last week’s Farnborough International Air Show, where both suppliers and aircraft manufacturers said they would mobilize to ensure everything necessary to keep production lines running smoothly, from first materials to small electronic components.
Component shortages forced Airbus yesterday to cut its forecast for annual aircraft deliveries and put the brakes on planned increases in production.
The resumption of deliveries of the 787 Dreamliner aircraft, but also the clearing of the inventory of the 737 MAX aircraft which is the main source of revenue for Boeing, in order for it to recover from successive crises, the pandemic, but also the grounding of the 737 MAX aircraft. Dealing with the crises had the consequence of substantially reducing the financial liquidity of the company, but also increasing its debt.
Boeing said it has seen no slowdown in demand for the jet, adding that supply chain issues will be the key factor in regulating production of the 737 and 787.
However, the company, which has its headquarters in Virginia, expects an acceleration of deliveries for the two above-mentioned types of aircraft, anticipating a further improvement in the level of its financial liquidity in the second half of the year, but also in the following year.
Source: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
