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CHICAGO (Reuters) -Boeing Co’s top executives on Wednesday forecast higher free cash flow and a ramp-up in jet deliveries next year, as they sought to reassure skeptical investors the planemaker was recovering from a crippling slowdown following the pandemic and the grounding of its best-selling jet after fatal crashes.
The U.S. aerospace giant told investors and analysts at its first public investor meeting since 2016 that it expects to deliver 400-450 MAX planes next year, more than the 375 single-aisle planes it expects to deliver this year. It expects to deliver 70-80 787 planes in 2023.
Boeing (NYSE:BA) shares were up about 2.5% at $147.00 in mid-day trade. They have fallen 29% this year, steeper than the 19% decline in the S&P 500 index, as Boeing has fallen short of Wall Street earnings estimates for five straight quarters.
“We believe the plan that we have out here, the guidance that we’ve provided is doable. If we didn’t, we wouldn’t put it up,” said Chief Executive David Calhoun. “We think it’s cleareyed with respect to what we’re going to face.”
The Virginia-based planemaker is trying to emerge from the overlapping crises that left it with a pile of debt. Investors have been skeptical due to production delays, cuts in the jet delivery outlook and mounting losses at its defense business.
Boeing projects that higher jet deliveries will generate $3 billion-$5 billion in free cash flow next year, higher than $1.5 billion-$2 billion expected this year.
“The playbook for us is very straightforward – deliver airplanes, generate cash, pay down debt,” Chief Financial Officer Brian West said.
Investors have been calling for Boeing to lay out clear targets that it is certain it can meet, particularly after the company twice cut estimates for MAX plane deliveries this year.
The company last month predicted it would deliver 375 MAX planes this year, lower than a July target of “low 400s.” At the start of the year, it had planned to deliver about 500 of the single-aisle aircraft.
Both 737 MAX and 787 jets hold the key to its free cash flow and profits. Boeing needs to shore up its cash flow to help pay off its debt.
