Earnings of $3.58 a share.

Raised its full year 2018 earnings forecast to a range of $14.90 to $15.10, up from its previous guidance of $14.30 to $14.50.

Delivered 190 commercial aircraft in the third quarter, bringing its total deliveries for the year to 568.

They also reported expanded margins and strong cash flow as well as reaffirmed their commitment to delivering 52 737 a month. Overall a very strong Q3 for Boeing, beating all the street estimates and expanding margins.

https://www.reuters.com/article/us-boei ... SKCN1MY1JK

Very nice

T773ER wrote:

Earnings of $3.58 a share.

Raised its full year 2018 earnings forecast to a range of $14.90 to $15.10, up from its previous guidance of $14.30 to $14.50.

Delivered 190 commercial aircraft in the third quarter, bringing its total deliveries for the year to 568.

They also reported expanded margins and strong cash flow as well as reaffirmed their commitment to delivering 52 737 a month. Overall a very strong Q3 for Boeing, beating all the street estimates and expanding margins.

https://www.reuters.com/article/us-boei ... SKCN1MY1JK

First: Congratulations to Boeing!

The most important question in this Forum however is: How is the dstatus of the 787 deferred cost?
Anyone who figured it out yet?

Flyglobal

Flyglobal wrote:

T773ER wrote:

Earnings of $3.58 a share.

Raised its full year 2018 earnings forecast to a range of $14.90 to $15.10, up from its previous guidance of $14.30 to $14.50.

Delivered 190 commercial aircraft in the third quarter, bringing its total deliveries for the year to 568.

They also reported expanded margins and strong cash flow as well as reaffirmed their commitment to delivering 52 737 a month. Overall a very strong Q3 for Boeing, beating all the street estimates and expanding margins.

https://www.reuters.com/article/us-boei ... SKCN1MY1JK

First: Congratulations to Boeing!

The most important question in this Forum however is: How is the dstatus of the 787 deferred cost?
Anyone who figured it out yet?

Flyglobal

Was up to $23 million reduction per plane delivered so it continues to accelerate. They delivered 35 so it was $805 million in reduction in this quarter.

Boeing's press release for the Q3 results:
http://boeing.mediaroom.com/2018-10-24- ... S-Guidance

And the deferred costs for the 787:
https://www.boeing.com/investors/accoun ... ions.page/

They claim that the Boeing Commercial operating margin was higher because "higher 787 margin". That is reflected in the growth of the reduction of the deferred costs. Q4 should be interesting for the deferred costs as all the 787-10 that were used as prototype should be delivered in this quarter.

Momo1435 wrote:

Boeing's press release for the Q3 results:
http://boeing.mediaroom.com/2018-10-24- ... S-Guidance

And the deferred costs for the 787:
https://www.boeing.com/investors/accoun ... ions.page/

They claim that the Boeing Commercial operating margin was higher because "higher 787 margin". That is reflected in the growth of the reduction of the deferred costs. Q4 should be interesting for the deferred costs as all the 787-10 that were used as prototype should be delivered in this quarter.

Yeah the real key quarters are really second half of next year once rate 14 stabilizes and you have no more prototypes in the system. If it gets pushed to $30 million or so per plane it’s all over but the crying given the pace they have put new orders on.

More importantly Boeing is putting something on the order of $30 plus million in cash into its operations for everyone of these they deliver.

Looking at it further I would say Boeing is now in the ballpark of takinging the block to zero within the current accounting block. I suspect it goes to zero in 2022-23 provided they can sustain delivery rates through that period. We should start seeing billion plus dollar reductions each quarter in 2019 and I would estimate it gets to somewhere in the $5-$5.5 billion a year in reduction by 2020.

bigjku wrote:

Looking at it further I would say Boeing is now in the ballpark of takinging the block to zero within the current accounting block. I suspect it goes to zero in 2022-23 provided they can sustain delivery rates through that period. We should start seeing billion plus dollar reductions each quarter in 2019 and I would estimate it gets to somewhere in the $5-$5.5 billion a year in reduction by 2020.

I believe I read somewhere that the accounting block has a profit built into it. In other words, when the deferral is down to zero Boeing has gone beyond break even, but actually could claim to have made a profit on every Dreamliner delivered.

Is this true?

SC430 wrote:

bigjku wrote:

Looking at it further I would say Boeing is now in the ballpark of takinging the block to zero within the current accounting block. I suspect it goes to zero in 2022-23 provided they can sustain delivery rates through that period. We should start seeing billion plus dollar reductions each quarter in 2019 and I would estimate it gets to somewhere in the $5-$5.5 billion a year in reduction by 2020.

I believe I read somewhere that the accounting block has a profit built into it. In other words, when the deferral is down to zero Boeing has gone beyond break even, but actually could claim to have made a profit on every Dreamliner delivered.

Is this true?

If I understand it correctly, the accounting block is just the number they expect to sell. They have not declared a forward loss, so they don't expect to lose money over the number of planes in the accounting block. That doesn't tell us whether they will simply break even or profit. That's my understanding of it.

cledaybuck wrote:

SC430 wrote:

bigjku wrote:

Looking at it further I would say Boeing is now in the ballpark of takinging the block to zero within the current accounting block. I suspect it goes to zero in 2022-23 provided they can sustain delivery rates through that period. We should start seeing billion plus dollar reductions each quarter in 2019 and I would estimate it gets to somewhere in the $5-$5.5 billion a year in reduction by 2020.

I believe I read somewhere that the accounting block has a profit built into it. In other words, when the deferral is down to zero Boeing has gone beyond break even, but actually could claim to have made a profit on every Dreamliner delivered.

Is this true?

If I understand it correctly, the accounting block is just the number they expect to sell. They have not declared a forward loss, so they don't expect to lose money over the number of planes in the accounting block. That doesn't tell us whether they will simply break even or profit. That's my understanding of it.

The accounting block does have a profit baked into it. Boeing booked/s that profit with every frame delivered even when they lost money. When it cost more to build and make that profit than they are paid the deferred balance goes up. When it cost less than that it falls.

I suspect the profit per frame in the block to average out to something like Boeing’s margin of around 10%. So I you figure an average delivered price of $120 million you can throw $10-$12 million in profit on that number.

bigjku wrote:

Looking at it further I would say Boeing is now in the ballpark of takinging the block to zero within the current accounting block. I suspect it goes to zero in 2022-23 provided they can sustain delivery rates through that period. We should start seeing billion plus dollar reductions each quarter in 2019 and I would estimate it gets to somewhere in the $5-$5.5 billion a year in reduction by 2020.

The timing could be right in time for the next big thing! Anyone imagine what that could be?


Flyglobal

I had an excellent accounting professor who distilled the discipline to three words; get the cash.

BA is doing this while investing in new programs, new technologies, increasing the dividend and repurchasing shares.

Few companies can do all this.

I’d say the 787 mistakes have been turned into goodwill.

Oh no!! Not another damn thread full of gibberish on the deferred production cost.

Great quarter by Boeing. Been a great run for A+B and it continues.

On the surface A & B look petty equal. Both produce excellent,safe, appealing products. But any differences in sales and deliveries do not explain the difference with the results.

The first priority of the incoming boss at Airbus should be to look at why Boeing has more cash than it knows what to do with. Boeing is simultaneously funding new models, paying generous dividends, funding a stock buy-back program, and making strategic acquisitions.

Planeflyer wrote:

I had an excellent accounting professor who distilled the discipline to three words; get the cash.

Pretty much. What happens with the deferred production costs at this point may be interesting for business school students but shouldn't matter one whit to shareholders. The information is only useful because of what it tells us (only a limited amount, but more than zero) about the current actual cost of producing a 787 frame.

Planeflyer wrote:

I had an excellent accounting professor who distilled the discipline to three words; get the cash.

One of mine said “it’s all about the cash flow, or as the French say ‘le cache fleau’”

Or as Rod Tidwell would say: “Show me the money!”

Bricktop wrote:

Planeflyer wrote:

I had an excellent accounting professor who distilled the discipline to three words; get the cash.

One of mine said “it’s all about the cash flow, or as the French say ‘le cache fleau’”

Or as Rod Tidwell would say: “Show me the money!”

Classic, much better than get the cash!

VV wrote:

Oh no!! Not another damn thread full of gibberish on the deferred production cost.

Imagine the day when all the deferred costs are paid off. A new peeve will need to be found!

VV wrote:

Oh no!! Not another damn thread full of gibberish on the deferred production cost.

Imagine the day when all the deferred costs are paid off. A new peeve will need to be found!

VV wrote:

Oh no!! Not another damn thread full of gibberish on the deferred production cost.

I’m afraid it’s inevitable as for the disingenuous fanboy no topic is juicier than an a nebulous accounting issue that can be used to obfuscate the results.

VV wrote:

Oh no!! Not another damn thread full of gibberish on the deferred production cost.

Not difficult to imagine.

Be prepared for this discussion each quarter. So next discussion then will be 4th week of 2019 discussing the yearly results.


Flyglobal

Flyglobal wrote:

VV wrote:

Oh no!! Not another damn thread full of gibberish on the deferred production cost.

Not difficult to imagine.

Be prepared for this discussion each quarter. So next discussion then will be 4th week of 2019 discussing the yearly results.


Flyglobal

Perhaps we should bet on how much free cash flow for the full year 2018 is when Boeing will announce its result in January 2019.
Will it be 14 billion or 15 billion?

SC430 wrote:

On the surface A & B look petty equal. Both produce excellent,safe, appealing products. But any differences in sales and deliveries do not explain the difference with the results.

The first priority of the incoming boss at Airbus should be to look at why Boeing has more cash than it knows what to do with. Boeing is simultaneously funding new models, paying generous dividends, funding a stock buy-back program, and making strategic acquisitions.

Rarely noticed or noted in these pages.
Comparisons between AB and BA are predictably binary, EG:
- If AB does "A" then BA will respond with "B"; OR
- If BA does "C" then AB will respond with "D".

However the ground-rules have now changed, IMO.

-- BA now has the financial firepower to do parallel new A/C developments if appropriate.



Technical staff resources?

The good folks at EMB joining the JV may well have some truly exciting projects to work on, I suspect.

cheers

brindabella wrote:

SC430 wrote:

On the surface A & B look petty equal. Both produce excellent,safe, appealing products. But any differences in sales and deliveries do not explain the difference with the results.

The first priority of the incoming boss at Airbus should be to look at why Boeing has more cash than it knows what to do with. Boeing is simultaneously funding new models, paying generous dividends, funding a stock buy-back program, and making strategic acquisitions.

Rarely noticed or noted in these pages.
Comparisons between AB and BA are predictably binary, EG:
- If AB does "A" then BA will respond with "B"; OR
- If BA does "C" then AB will respond with "D".

However the ground-rules have now changed, IMO.

-- BA now has the financial firepower to do parallel new A/C developments if appropriate.



Technical staff resources?

The good folks at EMB joining the JV may well have some truly exciting projects to work on, I suspect.

cheers

In theory AB could counter BA but in reality AB has not had the cash flow to counter BA for 3-4 years.


This was the year AB management promised to start the improvement of cash flow but this will be not happen. I think the fact that AB is so poor at generating cash is the real reason for the management shakeup that we see.

Either the costs to produce the 32xx are way too high or the PP offered by JL were too low but something is terribly wrong in that AB is generating so little cash flow given the number of AC delivered.. Between the 350 and 32xx programs they should be able to correct the situation but they must move quickly making tough decisions if they don't want to fall further behind.

Planeflyer wrote:

brindabella wrote:

SC430 wrote:

On the surface A & B look petty equal. Both produce excellent,safe, appealing products. But any differences in sales and deliveries do not explain the difference with the results.

The first priority of the incoming boss at Airbus should be to look at why Boeing has more cash than it knows what to do with. Boeing is simultaneously funding new models, paying generous dividends, funding a stock buy-back program, and making strategic acquisitions.

Rarely noticed or noted in these pages.
Comparisons between AB and BA are predictably binary, EG:
- If AB does "A" then BA will respond with "B"; OR
- If BA does "C" then AB will respond with "D".

However the ground-rules have now changed, IMO.

-- BA now has the financial firepower to do parallel new A/C developments if appropriate.



Technical staff resources?

The good folks at EMB joining the JV may well have some truly exciting projects to work on, I suspect.

cheers

In theory AB could counter BA but in reality AB has not had the cash flow to counter BA for 3-4 years.


This was the year AB management promised to start the improvement of cash flow but this will be not happen. I think the fact that AB is so poor at generating cash is the real reason for the management shakeup that we see.

Either the costs to produce the 32xx are way too high or the PP offered by JL were too low but something is terribly wrong in that AB is generating so little cash flow given the number of AC delivered.. Between the 350 and 32xx programs they should be able to correct the situation but they must move quickly making tough decisions if they don't want to fall further behind.

cheers

Planeflyer wrote:

brindabella wrote:

SC430 wrote:

On the surface A & B look petty equal. Both produce excellent,safe, appealing products. But any differences in sales and deliveries do not explain the difference with the results.

The first priority of the incoming boss at Airbus should be to look at why Boeing has more cash than it knows what to do with. Boeing is simultaneously funding new models, paying generous dividends, funding a stock buy-back program, and making strategic acquisitions.

Rarely noticed or noted in these pages.
Comparisons between AB and BA are predictably binary, EG:
- If AB does "A" then BA will respond with "B"; OR
- If BA does "C" then AB will respond with "D".

However the ground-rules have now changed, IMO.

-- BA now has the financial firepower to do parallel new A/C developments if appropriate.



Technical staff resources?

The good folks at EMB joining the JV may well have some truly exciting projects to work on, I suspect.

cheers

In theory AB could counter BA but in reality AB has not had the cash flow to counter BA for 3-4 years.


This was the year AB management promised to start the improvement of cash flow but this will be not happen. I think the fact that AB is so poor at generating cash is the real reason for the management shakeup that we see.

Either the costs to produce the 32xx are way too high or the PP offered by JL were too low but something is terribly wrong in that AB is generating so little cash flow given the number of AC delivered.. Between the 350 and 32xx programs they should be able to correct the situation but they must move quickly making tough decisions if they don't want to fall further behind.

Here is a telling number. Boeing gets $660,000 in revenue per employee, While Airbus only gets $580,000 per employee. That will sure kill the bottom line. AIrbus was so busy selling airplanes, they forgot to make money doing it.

And notably Lockheed etc in the Military sphere are complaining that BA can under-price them; they insinuate that he has too much money to use sensibly.
Muilenberg basically is saying that he has it covered, and will more than make it all back over the lifetime of the particular products.

(My two cents? I wouldn't bet against Muilenberg).

BA's muscles are visibly growing as we watch.

Planeflyer, you are right:
AB has to make a lot of decisions fast. And they had all better be right. Every single one.

Will AB go bust?

OF COURSE NOT!

They will make plenty of money - but not near enough to stay really competitive, as things are unfolding. 2018 looks like say $12Bn nett profit for BA - but FREE CASH say $16Bn.

2019? FREE CASH say $20Bn is not unreasonable. (Lots of assistance from 787 - please note Mjoelnir. )

Revelation recently challenged me to include in my argument that JL has recently recommended BA as a "BUY".
I don't think I can be clearer than this, Rev!

cheers

Regards Muilenbergs comments, a good read is the earnings conference call held by Dassault systems the other day.

I’m guessing here but I think BA used the advances in 3d digital design married to know how gained in composites to win the tx and mq25 programs.

Dassault has publicly stated that in 2029 they will have massive implementation at BA which I assume will be used on the 797.

797 RD will ramp up as 777x ramps down so good flow to allow BA to perfect digital 3d design and new mfg methods in time to develop NG NB.

This the way to prep for China.

Long BA and Dassault!

Sorry I said 2029 when I should have said 2019 regards the rollout of 3D digital design seats at BA.

Planeflyer wrote:

Dassault has publicly stated that in 2019 they will have massive implementation at BA which I assume will be used on the 797.

Oh no, not another software update that would muck up the system for a while until all the bugs are worked out .

Alas . . . the price one pays for progress . . .

bt

bikerthai wrote:

Planeflyer wrote:

Dassault has publicly stated that in 2019 they will have massive implementation at BA which I assume will be used on the 797.

Oh no, not another software update that would muck up the system for a while until all the bugs are worked out .

Alas . . . the price one pays for progress . . .

bt

Driven by the cloud tremendous progress has been made in software reliability

Google containers, software to see what I mean. Dassault has a very robust system which I think BA has already used for the TX and MQ25.

There is a tremendous sea change about to take place with regional and air taxi and BA and AB need to leverage their understanding of safety to win thus market. Both are well positioned to do so but only Boeing has the resources to own this. AB needs to streamline their commercial AC operation to generate cash to capitalize on these opportunities.

From delivery perspective, it seems they also recovered from the hiccups this summer.

What is the delivery target for this year?

If A-net had existed in 1959 it would be awash in threads about how Boeing had so screwed up the development of the 707 that they could never, ever make a profit on the program. Well, it took much longer than anyone within Boeing expected, but they did eventually. But more importantly, it launched Boeing from being pretty much on the sidelines of the airliner business into being the dominant player. And I see a similar path with the 787. They DID screw it up badly, but the concept was so good that they are able to sell enough of them to overcome their initial stumbles and turn a profit. And they have reclaimed the title from Airbus as the largest airliner manufacturer. And from looking at where each company is now financially, they should be able to keep it if they do things right going forward.

Planeflyer wrote:

In theory AB could counter BA but in reality AB has not had the cash flow to counter BA for 3-4 years.

This was the year AB management promised to start the improvement of cash flow but this will be not happen. I think the fact that AB is so poor at generating cash is the real reason for the management shakeup that we see.

Either the costs to produce the 32xx are way too high or the PP offered by JL were too low but something is terribly wrong in that AB is generating so little cash flow given the number of AC delivered.. Between the 350 and 32xx programs they should be able to correct the situation but they must move quickly making tough decisions if they don't want to fall further behind.

This is what I don't understand: A.net dogma is that the A32X program is a cash machine, especially the A321 which has a high share of the NB blend. I read repeatedly that the A380 is not hurting the P&L that badly, that the A350 rollout is going as planned, and that the A330neo program, while not setting the sales world on fire was so cheap to do, that it too is solid, and any 330ceos are being made on a paid off line as well. But Airbus doesn't seem to "show me the money". Can a.net dogma be wrong, or is my understanding lost in translation from Dutch, German or Icelandic?

It is interesting nobody started the jibber jabber about 787 deferred production cost yet.

What's going on?

I think part of Airbus's manufacturing problems is that they are in the middle of updating to increase rate of production and increasing profits substantially. It often is not an easy transition.

Bricktop wrote:

Planeflyer wrote:

In theory AB could counter BA but in reality AB has not had the cash flow to counter BA for 3-4 years.

This was the year AB management promised to start the improvement of cash flow but this will be not happen. I think the fact that AB is so poor at generating cash is the real reason for the management shakeup that we see.

Either the costs to produce the 32xx are way too high or the PP offered by JL were too low but something is terribly wrong in that AB is generating so little cash flow given the number of AC delivered.. Between the 350 and 32xx programs they should be able to correct the situation but they must move quickly making tough decisions if they don't want to fall further behind.

This is what I don't understand: A.net dogma is that the A32X program is a cash machine, especially the A321 which has a high share of the NB blend. I read repeatedly that the A380 is not hurting the P&L that badly, that the A350 rollout is going as planned, and that the A330neo program, while not setting the sales world on fire was so cheap to do, that it too is solid, and any 330ceos are being made on a paid off line as well. But Airbus doesn't seem to "show me the money". Can a.net dogma be wrong, or is my understanding lost in translation from Dutch, German or Icelandic?

Aviation Week is reporting that there are problems with the new interior arrangement in the A321's, there was only 10 delivered in August & 7 in September. Overall, Airbus needs to deliver over 400 planes in the 4th quarter to make its 800 plane production goal. They have not produced over 300 in any prior quarter this year.

http://aviationweek.com/commercial-avia ... n-problems

Cash flow will not be good if annual production is 100 or more planes short of anticipated production.

I think the real question is whether A321 production issues in Hamburg will affect Boeing's 4th quarter results and free cash flow.

And finally, chilling winter this year could freeze 787 deferred production cost.

Either the 32xx is not nearly as profitable as we think or the rest of AB is much of a mess than we know.

The fact that no one knows is telling.

Bricktop wrote:

Planeflyer wrote:

I had an excellent accounting professor who distilled the discipline to three words; get the cash.

One of mine said “it’s all about the cash flow, or as the French say ‘le cache fleau’”

Or as Rod Tidwell would say: “Show me the money!”

I'll add another: You can't buy a beer with profit.

DfwRevolution wrote:

I'll add another: You can't buy a beer with profit.

If it is free then it is not too expensive.

Let me apologize in advance but there is no such thing as free beer.

Planeflyer wrote:

Let me apologize in advance but there is no such thing as free beer.

It is very true. That's probably why Donald only drinks diet coke.

Yeah, the older I get the more expensive it gets.

DfwRevolution wrote:

Bricktop wrote:

Planeflyer wrote:

I had an excellent accounting professor who distilled the discipline to three words; get the cash.

One of mine said “it’s all about the cash flow, or as the French say ‘le cache fleau’”

Or as Rod Tidwell would say: “Show me the money!”

I'll add another: You can't buy a beer with profit.

Love it. But you can’t buy beer, you can only rent it.

Planeflyer wrote:

In theory AB could counter BA but in reality AB has not had the cash flow to counter BA for 3-4 years.

In terms of new program launch, Airbus has Launch Aid in the bag, like it or not, that is the great equalizer to the economic position, the underlying financial reality does not determine the ability to qualify for financing nor its terms.

par13del wrote:

Planeflyer wrote:

In theory AB could counter BA but in reality AB has not had the cash flow to counter BA for 3-4 years.

In terms of new program launch, Airbus has Launch Aid in the bag, like it or not, that is the great equalizer to the economic position, the underlying financial reality does not determine the ability to qualify for financing nor its terms.

Are they planning to launch a new program?

If as the poster mentioned, Boeing launches a new program, Airbus will not take 3 to 4 years to respond because their cash flow is lower.
Its a hypothetical.

Planeflyer wrote:

In theory AB could counter BA but in reality AB has not had the cash flow to counter BA for 3-4 years.

One of the reasons why Airbus is behind in cash is the maturity of its programs, and if you take a look of their high inventory you will see how that's eating its cash. A350 will only start generating a positive cash flow this year, and the A330NEO and A320NEO aren't helping either. In a year or two, when P&W starts delivering more reliable engines and the A330NEO starts taking off the cash flow should jump. The cash flow of 2017 is double what it was in 2016 for Airbus, and it should only get better from there. Don't forget the A220 family that Airbus suddenly got without spending anything, that should help them too.

That's without counting the big difference in cash between Boeing and Airbus in the defence division.