In This Article:
This article first appeared on Simply Wall St News.
The Boeing Company (NYSE: BA) has been under perpetual pressure for the last few years between external and internal problems. The company lost billions due to the 2020 pandemic and its various production issues. At this point, the positive catalysts look few and far between.
See our latest analysis for Boeing.
Q4 Earnings Results
-
Non-GAAP EPS: - US$ 7.69 (miss by US$7.50)
-
Revenue: US$14.79b (miss by US$1.87b)
-
Revenue growth: -3.3% Y/Y
-
Total backlog: US$377b
-
Net order increase: 535
Manufacturing flaws in 787 Dreamliner jets attributed to increasing in costs of US$5.5b, as the company has had to inspect all of them, incurring penalties to airlines for the delays. Dreamliner deliveries are still on pause. Overall, the company narrowed full-year losses to US$4.3b from US$11.9b in 2020.
While the company was surprised with the first recorded positive cash flow since 2019 (US$494m), those results were overshadowed by the 787 costs.
However, it is necessary to point out that 787 deferred accounts also went down by US$3.5b in Q4, while they go down by a much smaller amount in average years. Yet, we have an opposite situation as there were no 787 deliveries at all!
What Is Boeing's Net Debt?
The chart below, which you can click on for greater detail, shows that Boeing had US$62.2b in debt, about the same as the year before. However, because it had a cash reserve of US$20.0b, its net debt is less, at about US$42.2b.
How Healthy Is Boeing's Balance Sheet?
We can see from the most recent balance sheet that Boeing had liabilities of US$85.8b falling due within a year and liabilities of US$75.3b due beyond that. Offsetting these obligations, it had cash of US$20.0b as well as receivables valued at US$12.3b due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by US$128.9b.
Given this deficit is higher than the company's market capitalization of US$114.2b, we think shareholders really should watch Boeing's debt levels. Hypothetically, heavy dilution would be required if the company was forced to pay down its liabilities by raising capital at the current share price.
There's no doubt that we learn most about debt from the balance sheet. But ultimately, the future profitability of the business will decide if Boeing can strengthen its balance sheet over time. So if you're focused on the future, you can check out this free report showing analyst profit forecasts.
In the last year, Boeing wasn't profitable at an EBIT level but managed to grow its revenue by 3.3%, to US$63b. While things seem to be slowly improving, Boeing's turnaround is a bit slow for our taste.