Boeing Co Q4 2024 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: David Strauss - Barclays Estimates - Analyst : Kelly, I wanted to ask how you viewed the restart on MAX, how that's gone. You mentioned some of the -- you mentioned KPPs that you have with the -- or KPIs that you have with the FAA. Can you maybe elaborate on what exactly those are, how close you're already hitting, what's necessary to get to -- to go above 38 a month? And then Brian, can you just give us an idea of what to expect for all-in MAX and 787 deliveries in 2025?

Question: Peter Arment - Robert W. Baird & Co Inc - Analyst : Hey, Brian. Maybe if you could walk us through a little bit on the free cash flow dynamics for 2025. I know you called out a few things, some of the moving parts. But just thinking about working capital headwinds or 777X spend or BDS losses, we've been estimating about a $5 billion outflow this year. I think it's little above the consensus of $4 billion. Anything to highlight that you could help us maybe that potentially could be -- reduce that outflow? Or how are you thinking? I know you gave us the first half versus second half dynamics, but anything else that you could provide more color on. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 28, 2025 / 3:00PM, BA.N - Q4 2024 Boeing Co Earnings Call

Question: Sheila Kahyaoglu - Jefferies - Analyst : Kelly, maybe on the fixed price development programs within BDS. It seems like the timing to stabilize those keeps getting pushed to the right. How are you actively managing those programs? And what are you looking to change? And then, Brian, related to that, how do you correlate those charges? I think you mentioned one-third is now. Can you maybe size that cash outflow for '25? Is it $3 billion related to BDS and then $1 billion in '26? Does the business become breakeven in '27? And when does it become positive?

Question: Sheila Kahyaoglu - Jefferies - Analyst : Got it. So breakeven could be possible in '26 or maybe '27?

Question: Ron Epstein - BofA Global Research - Analyst : Kelly, could you talk about how you're thinking about Boeing's portfolio? I mean, there's been a fair amount of press about maybe some things could be up for sale, maybe not. What's core, what isn't? So like the way I've been thinking about it, one of the things that's been talked about is maybe selling Jeppesen. But on one hand, maybe that's a good idea. But on the other hand, that puts Boeing's name in pretty much every cockpit of every airplane on the planet. And is that a bad thing? So I mean, how are you thinking about it? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 28, 2025 / 3:00PM, BA.N - Q4 2024 Boeing Co Earnings Call

Question: Ron Epstein - BofA Global Research - Analyst : Got it. And you'd expect maybe we'll know more about this in the next 12 to 18 months, something like that?

Question: Myles Walton - Wolfe Research - Analyst : So on the supply chain and maybe the Spirit integration, how key is that to your ability to get to 38 and then get above 38? And then if you could just quickly touch on the 787 and the supply chain constraints you're observing there, specifically on interiors and if heat exchangers are still the issue, and how quickly you expect those to release within the context of 2025?

Question: Myles Walton - Wolfe Research - Analyst : Okay. And Brian, the delivery number for 787 for this year. 75, 80, is that a doable number?

Question: Scott Deuschle - Deutsche Bank - Analyst : Kelly, could you characterize the pace of which you think the business can liquidate 777X aircrafts from inventory once EIS hits? And then are you expecting the first-class cabin seats to be certified for the 777X launch customers by the time 777X itself is type certified or is there any risk of delay there on seating as well? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 28, 2025 / 3:00PM, BA.N - Q4 2024 Boeing Co Earnings Call

Question: Seth Seifman - JPMorgan - Analyst : I guess I wanted to follow up on maybe two other items as we think about the cash flow this year. You talked about winding down the shadow factories, both of them, I guess. That was something that in the past, we've talked about as a key enabler of enhanced profitability. How do we think about factoring that into the cash flow improvement that we're seeing this year? And then also, any -- the financial implications and cash flow implications of Spirit integration in the second half.

Question: Noah Poponak - Goldman Sachs Research - Analyst : What is it about the T-7A specifically that it keeps having so much cost creep? And I guess, Kelly, as you look at this portfolio, everything in defense is complex and appreciate the amount of work that goes into these. But I think there's been some investor confusion around the dollar size relative to the perceived complexity of these programs. So what is causing the cost creep and how do you fix it? And you mentioned the updated acquisition approach on that program specifically. Can you detail that a little bit further?

Question: Noah Poponak - Goldman Sachs Research - Analyst : So appreciate learning that lesson and not doing that again. But if you live with the decisions that were made on the existing programs for -- until the end of those programs, how do you have confidence in the cash flow improvement in the segment in the near term that you've expressed here?

Question: Doug Harned - Bernstein - Analyst : It sounds like you're in a very good position right now to get to the 38 a month level given that you're already at the 20 -- in the 20s on the MAX. But historically, upward rate breaks have been pretty challenging. And when you look beyond the 38 a month to 42 and subsequent rate breaks, how are you thinking about what you need to get done to make sure that you have the right team in place to make those rate breaks happen, given that a lot of people have left over the past five years or so? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 28, 2025 / 3:00PM, BA.N - Q4 2024 Boeing Co Earnings Call

Question: Doug Harned - Bernstein - Analyst : And is there anything you would point to in the supply chain that you particularly want to focus on to make sure you don't run into an issue when you take your next breakup?

Question: Jason Gursky - Citi - Analyst : Brian, one for you and then just a quick one for Kelly as well. Brian, for you, BCA margins. You took some charges this quarter on the programs that were in forward loss positions. I suspect though that will have some impacts on the margins for some of your more profitable programs as well given all those costs. I'm just curious, what does the margin cadence look like for BCA over the next six to eight quarters as you're ramping in production? When do we get the chance here to flip to the positive range on margins? And then just the long-term implications of these cost increases coming out of the labor strike, that thing, on the financial model and what BCA margins are going to stake to over time once you're up at those targeted production rates? And then Kelly, just really quickly for you. I received the company's corporate calendar. It's got the X66 on the cover. Just wondering if you could comment a little bit on that aircraft and what it means to the company and your general views on that development program for NASA.

Question: Gavin Parsons - UBS Equities - Analyst : I just wanted to follow up on that BCA margin question a little bit with the price side of that, the price/cost mix. How much of MAX 10 starting to contribute helps drive the margin up, how much of escalators or realized price increases over the coming years? And then a quick clarification on inventory. Just how much cash is tied up in both completed aircraft and WIP?

Question: Gautam Khanna - TD Cowen - Analyst : I just wanted to put a finer point on when you expect to be at 38 a month in terms of deliveries on the 37 and when realistically you could get to 42. I know you mentioned this year, but if you could put a finer point within the year.