Boeing CFO sees free cash flow usage of $4B-$4.5B in this quarter

Boeing CFO Brian West said while speaking at the Bank of America Global Industrials Conference, according to a transcript of the event: “With regards to capital allocation and our framework, no change. We want to generate cash after having invested in our own growth and then delever the balance sheet. And as I’ve said, the investment grade rating is still a priority. And when all said and done, we believe the $10 billion of free cash flow that we put out there, it’s going to take us longer to get there than we planned. It will be further out in that ’25, ’26 window. But we believe that the actions that we’re taking right now better position us for that long term. Now let’s talk about here and now. So we did not give annual guidance. But I will say that there’s some important changes that you have to consider. So as we have decided to hold airplanes in a position longer and get after this traveled work broadly, it is going to impact revenue, earnings and cash flows both in the quarter and in the year. And in the quarter, our free cash flow will be a usage of somewhere between $4 billion and $4.5 billion, and that’s higher than we originally planned back in January. And there’s two things driving it. First of all, there’s a combination of lower deliveries, lower volume at BCA and negative mix from inventoried airplanes. That’s a big piece of the delta. And then there are some working capital pressures, both inventory as well as some receipt timing. That is what’s going to happen in the quarter. And we also believe that some of that will not be made up for, for the full year. So the full year free cash flow is expected to be in the low single-digit billions of free cash flow generation. We are not at the moment where we can manage the near term for these financial outcomes because of the work at hand around stability. But I will tell you, we’re doing everything we can to make sure that we exit the year stronger. And we still are intent on delivering and solving for that long-term target that I just went through. And our expectation is that we’ll get more predictable and better positioned not only for our customers, but for our investors. It will take time.”