The Boeing Company: A year of instability and price fluctuations
Published on Sep 2, 2019

image

The Boeing Company, together with its subsidiaries, is the world's largest aerospace company that designs, develops, manufactures, sales, services, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems, and services worldwide.

The company operates in four segments: Commercial Airplanes; Defense, Space & Security; Global Services; and Boeing Capital.

Boeing, with its drop in revenue, underperformed the subsector average of 5.4 percent. Since the same quarter last year, revenues fell by 12.0 percent, weakness in the company's revenue led to lower EPS.

After a year of stock price fluctuations, the result is that The Boeing Company price has not changed very much. Since September 2018 until now, the stock fell by approximately 2.15 percent from 371.77 to 364.01. Although its weak earnings growth has played a role in this result, given the fact that the performance of the overall market, as measured by the S&P 500 Index, was similar.

Regarding the company’s financial performance, the gross profit margin for the second quarter of this fiscal year has declined when compared to the same period a year ago. Sales and net income fell, underperforming the average competitor within its subsector.

Boeing has very weak liquidity; the Quick Ratio is 0.25, which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity declined from the same period a year ago, despite already having very weak liquidity to begin with, which indicates a deteriorating cash flow. At the same time, stockholders' equity significantly decreased by 269.32 percent from the same quarter last year.

Early in March, a tragic crash of an Ethiopian Airlines jet that killed 157 people Sunday led to the worldwide grounding of its 737 Max jets, the company's most crucial plane.

As a result of the chaotic situation, the company decided to cut production on the 737 MAX 8 model. This was a terrible news for Boeing suppliers, especially General Electric (GE), the sole supplier of LEAP engines for the Boeing 737 MAX 8.

General Electric’s cash flow took a hit from the grounded 737 Max 8 model, and the manufacturer of the engines for the popular planes warned that the trend would persist through 2019, as the consequences from two fatal crashes ripples through Boeing’s supply chain.

Share this article

Read More

Microsoft Overtakes Apple as Most Valued Company
Microsoft Overtakes Apple as Most Valued Company
Why Should Trading Be in Your New Year’s Resolution?
New year's resolutions are mainly directed towards improving the quality of your life, which is usually achieved by better health and wealth. Read more in this blog about how to get closer to your dream lifestyle through trading.
How Do Central Banks Combat Inflation?
Have you ever wondered why central banks seem extremely concerned about inflation? Why is it so important to keep it in check and how do they do so? In this article, we will tap into how central banks combat inflation and their go-to tools for the job.
Asia's Diverse Population: How Could it Affect Investing?
The world’s biggest continent in population and size has something that the western world lacks and yearns to possess, which is the right demographics. Read about what the latest studies tell us about Asia’s demographics and how it could produce gigantic economies out of its nations.
Chinese Nationalism and Global Brands
How was Chinese nationalism able to throw powerhouse brands such as Nike, Adidas, and Nestle off their balance so easily? This article will dive into how things worked within the Chinese economy throughout the decades, crossing paths with the emergence of Western brands.