Boeing vows new cash gusher after sales top $100bn

Bloomberg

Boeing Co. soared after reporting record cash for 2018 while cracking the $100 billion sales barrier for the first time in its 102 years — and the US planemaker says the best is yet to come.
Revenue, earnings and cash are all poised to rise this year, building on fourth-quarter earnings that beat estimates, the company said in a statement. The lone blemish: Free cash flow of $2.45 billion in the last three months of 2018 missed analysts’ estimates.
The upbeat forecast shows that Boeing still sees room for improvement as it works to overcome factory stumbles in its jetliner business and speed output of its cash-cow 737 planes. Boeing and Airbus SE, its European rival, are riding high on a historic sales boom rooted in low interest rates and a growing middle class, particularly in Asia.
“There’s a very strong guide and no hint that there’s anything that could derail this,” said Ken Herbert, an analyst with Canaccord Genuity.
The shares jumped 6.3 percent to $387.84 at 3:45 p.m. in New York, behind just Apple Inc. on the Dow Jones Industrial Average. Boeing rose 13 percent this year, the third-best performance on the Dow.
Still, executives cautioned that aircraft sales could be tempered by US-China trade tensions and as planners in Beijing chart the country’s next five-year economic plan. So far, though, Boeing hasn’t been affected by the economic pullback that has clipped Apple, Caterpillar Inc. and other companies.

‘GOOD GROWTH’
“We’re not without challenges for this company, particularly if China keeps slowing,” Bloomberg Intelligence analyst George Ferguson said of Boeing. “But what we’ve got right now for 2019 looks like a good year.”
All of Boeing’s main businesses posted double-digit sales increases in the fourth quarter, and the company expects the momentum to continue into this year. While the shares have gyrated in response to trade tensions between Beijing and Washington, Boeing is still seen as a safe haven for its $490 billion backlog of unfilled orders.
The company has become an investor favorite for its prodigious cash generation, which it passes on to shareholders. Over the last five years, Boeing has repurchased 205 million shares, increased its dividend 180 percent and invested $35 billion in its business.
Revenue will climb to at least $109.5 billion this year, up from $101.1 billion in 2018 and higher than analysts predicted. Operating cash flow will be as much as $17.5 billion, about $2 billion more than 2018’s record stash.