US Stock Earnings Preview: Boeing Entering the Darkest Hour

Boeing is set to release its financial report on January 28, 2025.

Some time ago, the accident of Jeju Air Flight 7C2216, which shocked the world, once pushed Boeing to the forefront. Although the official cause of this accident has not been formally announced yet, people have cast a scrutinizing eye on this century-old company.

Let's first take a look at Boeing's previous financial report. The report shows that Boeing recorded a loss of $6.17 billion in the third quarter of 2024, which is the largest loss since the second quarter of 2020, and can be regarded as a disastrous financial report.

In contrast, Boeing's loss in the third quarter of 2023 was $1.638 billion, which seems insignificant compared to the current loss margin.

What's even worse is that data released by Boeing on January 15 showed that a total of 348 commercial aircraft were delivered last year, a significant drop from 528 in the previous year.

At the same time, the number of new orders has also been significantly reduced, less than half of what was recorded a year ago.

Obviously, combined with this delivery data, it can be seen that Boeing's upcoming financial report is likely to be another "disastrous" one.

Most of the revenue of aircraft manufacturers definitely comes from the delivery of aircraft.

This decline in delivery volume also will pose a huge pressure on Boeing's financial situation.

In addition to this, Boeing also has a serious cash flow problem.

In the third quarter, Boeing's operating cash flow was -$1.345 billion, and its free cash flow was -$1.956 billion.

It should be noted that free cash flow is the lifeblood for a company to maintain its operations. I basically wouldn't invest in a company with negative cash flow.

Now that Boeing has no money on its books, it can only raise funds by continuously issuing bonds. And due to the continuous downgrading of its credit rating, the financing cost is getting higher and higher, and the interest it needs to bear each quarter is also rising.

It even has to borrow new debt to pay off old debt, having fallen into a vicious cycle.

Moreover, it is not difficult to observe from the K-line chart that Boeing's stock price has experienced a significant pullback during the release of the financial report in the last two times. I'm afraid this time will be no exception. So I hope investors can invest rationally before it releases the financial report.$BA