The largest manufacturer in the US is Boeing. When Boeing makes and sells planes it is the largest company in the export balance of trade numbers or Boeing sells a lot of planes. If and when you believe the COVID is over and people can fly across country and around the world, the shares of Boeing is one of those companies expecting to move upwards. However, there is always a however in the investing world, Boeing had a very tough year.
In an article by Eric Johnson and Ankit Ajmera of Reuters, Boeing took a $6.5 billion charge on its new 777X Jetliner, this past year it slashed production which meant thousands of jobs were laid off and it had to battle to change reputations concerning the 737 Max. Boeing’s chief executive officer Dave Calhoun said the 777X will enter service in late 2023 as opposed to 2022.
Mr. Calhoun said despite the difficulties, Boeing has sufficient liquidity to manage the downturn. In terms of the 737 Max, Boeing has delivered 40 planes from its inventory, by the beginning of 2022 it expects to produce 31 of the 737 Max a month.
Boeing unveiled $8.3 billion in operating charges including $468 million for abnormal 737 production costs, $275 million over KC-46 aerial refueling tanker production issues, and $744 million settlement with the US Justice over a fraud conspiracy charge.
The company’s net loss rose to $8.44 billion up from $1.01 billion a year earlier, taking its full year losses to $11.94 billion. Revenue fell 15% to $15.3 billion in the quarter.
Linking to dividend paying stocks, Boeing has a duopoly with Airbus in the manufacturer of planes and because of that situation it can afford to make one time big mistakes and still be considered a good investment. As people begin to feel comfortable flying and the pent up energy to go somewhere is released, Boeing will be one of the beneficiaries of this trend because airlines will need their planes. When you buy into a dividend producing stock, it does not mean it is a perfect stock – they all have their issues, but it does mean it has the ability to weather a downturn and still be a good investment. There is always risk, however being hopeful for the future is a good thing.
There are more questions than answers, till the next time – to raising questions.