Taylor789
2020-09-24
说说你对这篇新闻的看法...
Boeing: Negative Dreamliner Prospects
免责声明：上述内容仅代表发帖人个人观点，不构成本平台的任何投资建议。
分享至
微信
复制链接
精彩评论
我们需要你的真知灼见来填补这片空白
打开APP，发表看法
APP内打开
发表看法
{"i18n":{"language":"zh_CN"},"detailType":1,"isChannel":false,"data":{"magic":2,"id":974107141,"tweetId":"974107141","gmtCreate":1600954142783,"gmtModify":1703823127371,"author":{"id":3545303008516803,"idStr":"3545303008516803","authorId":3545303008516803,"authorIdStr":"3545303008516803","name":"Taylor789","avatar":"https://static.tigerbbs.com/52379968908007b0c2140e029c38204e","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":2,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":7,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body><p>说说你对这篇新闻的看法...</p></body></html>","htmlText":"<html><head></head><body><p>说说你对这篇新闻的看法...</p></body></html>","text":"说说你对这篇新闻的看法...","highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/974107141","repostId":2069055032,"repostType":2,"repost":{"id":"2069055032","pubTimestamp":1600952420,"share":"https://www.laohu8.com/m/news/2069055032?lang=&edition=full","pubTime":"2020-09-24 21:00","market":"us","language":"en","title":"Boeing: Negative Dreamliner Prospects","url":"https://stock-news.laohu8.com/highlight/detail?id=2069055032","media":"Dhierin Bechai","summary":"Boeing 787 unit decreases still look strong.Underlying profit margins, however, have been eroded.Timeframe to recoup production costs has been extended and leveraged.","content":"<html><body><div><div><div><div>Summary</div><div><p>Boeing 787 unit decreases still look strong.</p><p>Underlying profit margins, however, have been eroded.</p><p>Timeframe to recoup production costs has been extended and leveraged.</p></div></div></div><div> <p><span>It have been a very interesting time for the Boeing <span>(NYSE:BA)</span> 787 and not in a positive way.</span> A flurry of manufacturing issues was found that trace back to Boeing’s outsourcing practice for the program and demand for new jets has dried up, leaving the Boeing 787 at a vulnerable spot right at the time when the Dreamliner provided meaningful cash to navigate Boeing through the Boeing 737 MAX crisis. Recent changes to the production levels have significantly altered our expectations for the program where we can only conclude that further slips to the program will trigger multi-billion charges that will make the Boeing 737 MAX liabilities look small. In this analysis, we look at Boeing’s previous quarter performance as there have been quite some changes that have affected performance in the first half of the year and also will affect Boeing’s performance on the Dreamliner program going forward.</p> <p><img height=\"340\" loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2020/9/23/9932311-1600876126356852.jpg\" width=\"605\"/></p> <p><em>Source: KOMO News</em></p> <h2>Boeing reduces production</h2> <p>Previously, I anticipated that Boeing would be reducing production to a level of eight aircraft per month starting in Q2 due to the pandemic. However, Boeing did end up accelerating the decrease in production from late 2020 to early 2020 and from a previously anticipated level of 12 aircraft per month to 10 aircraft per month, a level that earlier was envisioned to be hit in early 2021, and instead of hitting a production level of seven aircraft per month in 2022, the troubled jet maker will now hit a level of six aircraft per month a year earlier. So, what we are seeing is that the cuts are deeper and earlier which is hardly a good sign but does fit the depressed market for new aircraft.</p>\n<div></div> <p>All of the above resulted in significant margin erosion as some of the efficiencies in the system are lost and Boeing even had to remove 100 aircraft from the accounting quantity that it uses to calculate average profits for the entire accounting block. That means that the high initial production costs are now spread over less aircraft and a set of 100 profitable aircraft has been removed from the accounting quantity. That means that the program margin is being squeezed from two sides.</p> <h2>Deferred Balance For The Boeing 787</h2> <p>According to Boeing's data, the deferred balance for the Dreamliner program topped at $28.65B in Q2 2016 and our data shows that this happened at the 431st delivery. On average, for the first 431 deliveries, each delivery was roughly $66.5 million less profitable than the average assumed profit for the accounting block.</p> <p>In the second quarter of 2016, Boeing removed two test aircraft from the accounting block and reclassified them as R&D costs. As a result, the deferred balance dropped by roughly $1B. From an e-mail exchange with Boeing spokesman Doug Alder, we understood that the removal of the test aircraft from the accounting block led to the underlying assumed average profit per airframe to go up slightly, while the production costs of these aircraft were completely removed from the deferred production balance.</p> <p>The removal of the test aircraft, which were considered unsuitable for placement with customers, was a welcome de-risk. However, in order to get an accurate view of actual progress in zeroing out the deferred costs, which is the obvious target for Boeing here, it's needed to correct for the removal of the test aircraft from the accounting quantity.</p> <p>By doing so, we obtain the following graph:</p> <p><img loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2020/9/23/9932311-16008763700936565.png\"/></p>\n<div></div> <p><em>Figure 1: Accumulated deferred costs per quarter (Source: AeroAnalysis International)</em></p> <p>Figure 1 shows how the sum of the deferred balance and unamortized tooling and other non-recurring costs has increased over time but has started decreasing since 2016. Figure 1 already gives a pretty good visualization, and <a href=\"https://laohu8.com/S/AONE.U\">one</a> can imagine how the trend would continue in the future. What can be seen is that the deferred balance clearly decreased for the 17th consecutive quarter. However, it’s worrisome that the curve seems to be flattening as demand for wide body jets has dried up.</p> <p>The deferred balance after 968 deliveries is $17.96B vs. $18.79B last quarter or $18.4 million per airframe compared to $19.4 million per delivered airframe in the last quarter. This marks a $831 million improvement. To make things more visible, the differences in the total deferred balance per quarter divided by the number of <strong>rolled out jets</strong> can be plotted.</p> <p><img loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2020/9/23/9932311-1600876424660269.png\"/></p> <p><em>Figure 2: Boeing 787 deferred balance decrease per rolled out jet (Source: AeroAnalysis International)</em></p> <p><em>Note: Quarters with a block extension are marked purple, quarters with a block reduction are marked blue.</em></p> <p>Previously, we expressed the unit improvements in terms of delivered Dreamliner aircraft. When roll outs closely match the delivery figures that's not a problem. However, currently there exists a significant disjoint between loading and roll out figures on one hand and deliveries on the other hand. Therefore, using roll out figures are more reflective as it takes an actual roll out to burn off the deferred production balance. Figure 2 shows that the decrease in deferred balance per unit changed from minus $56.4 million per airframe in Q1 2014 to $36.1million in Q2 2020. Quarter over quarter, the deferred balance decrease per airframe improved by nearly $5.1 million per unit.</p>\n<div></div> <p>So, we are currently seeing that on<span> a unit and block level</span>, production is still very profitable. However, on a program level Boeing cannot take on a lot of headwinds anymore and that could be problematic as the company is facing crucial decisions regarding the future of the Boeing 787.</p> <p><img loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2020/9/23/9932311-16008764033999581.png\"/></p> <p><em>Figure 3: Accounting block Boeing 787 (Source: AeroAnalysis)</em></p> <p>Boeing has decreased the accounting block from 1,600 to 1,500 units. It took the company 393 deliveries to halt the rise in deferred balance. In the quarter after reaching this top, the company reclassified the costs incurred on early test frames that were later deemed unmarketable. This led to a lower deferred balance. If we add back this charge or deduct it over the entire range, which is more suitable, the actual top was at 431 deliveries with a deferred balance of $25.498B. Boeing has 532 units left to recoup the balance of $18B. Boeing still needs 24 sales to reach the 1,500 aircraft, which is the size of the accounting quantity.</p> <p>With the 525 aircraft that are yet to be delivered, Boeing needs to recoup $34.2 million per airframe on average on top of the average program margin to totally zero out the balance. Given that Boeing currently generates profits of ~36 million per airframe, the road toward zeroing out the deferred balance remains difficult, especially because the production rate is set to come down. The Boeing 787 family's discounted price label is in the $135 million range, which means that Boeing will need profit margins north of 20% on top of average assumed margins for the balance to zero out completely. Given that Boeing's best-selling wide-body jet, which operated in an almost unrivaled market space, the Boeing 777, has margins of 30%, the task at hand for BA seems to be doable but there's extremely little margin for any further slips.</p>\n<div></div> <h2>Conclusion</h2> <p>In Q2, the deferred production balance per unit increased sequentially and that itself seems to be a sign that the unit costs despite lower production rates are still strong. However, it should be noted that production rate decreases have been accelerated while the reduced production rates mean that it will take Boeing longer to burn off the balance. Overall, while the unit figures do not show it (yet), the space to reduce the deferred production balance to zero has become significantly tighter for Boeing due to the combination of accounting block contraction and potential losses of gains in the production system due to lower production volumes.</p> <span></span><span marketing_unit=\"X_5\"><p><strong>*Join The Aerospace Forum today and get a 15% discount*<img loading=\"lazy\" src=\"https://static.seekingalpha.com/uploads/2020/5/4/9932311-158864634703.png\"/></strong><span>The Aerospace Forum is the most subscribed-to service focusing on investments in the aerospace sphere, but we also share our holdings and trades outside of the aerospace industry</span>. <span>As a member, you will receive high-grade analysis to gain better understanding of the industry and make more rewarding investment decisions.</span></p>\n</span><p><b>Disclosure:</b> <span>I am/we are long BA, EADSF.</span> <span>I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.</span></p></div><div><div></div><span><svg height=\"16\" viewbox=\"5.799999713897705 7.799999237060547 20.30000114440918 16.39999771118164\" width=\"16\"><path d=\"M26.1 9.7c-.7.3-1.5.6-2.4.7.9-.5 1.5-1.3 1.8-2.3-.8.5-1.7.8-2.6 1-.8-.8-1.8-1.3-3-1.3-2.3 0-4.1 1.9-4.1 4.1 0 .3 0 .6.1.9-3.4-.2-6.5-1.8-8.5-4.3-.4.7-.7 1.4-.7 2.1 0 1.4.7 2.7 1.8 3.4-.7 0-1.3-.2-1.9-.5v.1c0 2 1.4 3.7 3.3 4.1-.3.1-.7.1-1.1.1-.3 0-.5 0-.8-.1.5 1.6 2.1 2.8 3.9 2.9-1.4 1.1-3.2 1.8-5.1 1.8-.3 0-.7 0-1-.1 1.8 1.2 4 1.9 6.4 1.9 7.6 0 11.8-6.3 11.8-11.8v-.5c.8-.6 1.5-1.3 2.1-2.2zm0 0\" fill=\"#FFFFFF\"></path></svg><svg height=\"18\" viewbox=\"11.000001907348633 6.799999713897705 9.999998092651367 18.600000381469727\" width=\"10\"><path d=\"M20.6 6.8h-2.4c-2.7 0-4.4 1.8-4.4 4.6v2.1h-2.4c-.2 0-.4.2-.4.4v3c0 .2.2.4.4.4h2.4V25c0 .2.2.4.4.4h3.1c.2 0 .4-.2.4-.4v-7.7h2.8c.2 0 .4-.2.4-.4v-3c0-.1 0-.2-.1-.3-.1-.1-.2-.1-.3-.1h-2.8v-1.8c0-.9.2-1.3 1.3-1.3h1.6c.2 0 .4-.2.4-.4V7.1c0-.2-.2-.3-.4-.3zm0 0\" fill=\"#FFFFFF\"></path></svg><svg height=\"16\" viewbox=\"6.200000286102295 6.699999809265137 19.5 18.700000762939453\" width=\"14\"><path d=\"M25.7 18.2v7.2h-4.2v-6.7c0-1.7-.6-2.8-2.1-2.8-1.2 0-1.8.8-2.1 1.5-.1.3-.1.6-.1 1v7H13s.1-11.4 0-12.6h4.2v1.8c.6-.9 1.5-2.1 3.8-2.1 2.7 0 4.7 1.8 4.7 5.7zM8.6 6.7c-1.4 0-2.4.9-2.4 2.2 0 1.2.9 2.2 2.3 2.2 1.5 0 2.4-1 2.4-2.2 0-1.2-.8-2.2-2.3-2.2zM6.5 25.4h4.2V12.8H6.5v12.6zm0 0\" fill=\"#FFFFFF\"></path></svg><svg height=\"14\" viewbox=\"4.5 6.499999523162842 22.900001525878906 18.999998092651367\" width=\"18\"><path d=\"M20.9 16.9c.1.2.1.3.1.5 0 .3-.1.6-.3.9-.2.2-.4.4-.7.5-.1 0-.3.1-.4.1-.3 0-.7-.1-.9-.3-.3-.2-.5-.5-.5-.8v-.3c0-.3.1-.6.3-.8.2-.2.4-.4.7-.5.2-.1.3-.1.5-.1.3 0 .6.1.8.3.1 0 .3.2.4.5zm-.9 3.7c-.1-.1-.3-.1-.4-.1-.1 0-.2 0-.3.1-1 .6-2.2.9-3.4.9-.9 0-1.8-.2-2.6-.6-.1 0-.3-.2-.4-.3-.1 0-.2-.1-.2-.1-.1 0-.2-.1-.3-.1-.1 0-.2 0-.3.1-.1.1-.2.1-.3.3-.1.1-.1.3-.1.4 0 .1 0 .2.1.4.1.1.1.2.3.3 1.1.8 2.5 1.1 3.8 1.1 1.2 0 2.4-.3 3.5-.8.1-.1.3-.2.5-.3.1-.1.2-.1.3-.2.1-.1.1-.2.2-.3v-.2c0-.1 0-.2-.1-.3l-.3-.3zm-8-1.9c.2.1.3.1.5.1.4 0 .7-.2 1-.4.3-.2.5-.6.5-1v-.1c0-.4-.2-.7-.5-1-.3-.2-.6-.4-1-.4h-.3c-.5.1-.9.5-1.1 1 0 .1-.1.3-.1.4 0 .3.1.6.3.9.2.3.4.4.7.5zm15.4-3.6v.2c0 .6-.2 1.1-.5 1.5-.3.4-.7.8-1.1 1v.7c0 1.2-.4 2.4-1.1 3.3-1.3 1.8-3.4 2.8-5.4 3.3-1.1.3-2.2.4-3.4.4-1.7 0-3.4-.3-4.9-.9-1.6-.7-3.2-1.7-4.1-3.3-.5-.8-.8-1.8-.8-2.8v-.7c-.4-.2-.8-.6-1.1-1-.3-.4-.5-1-.5-1.5 0-.8.3-1.5.8-2s1.2-.9 2-.9h.2c.4 0 .8.1 1.1.2.3.1.6.3.9.5.1 0 .2-.1.3-.1 1.7-1 3.6-1.4 5.4-1.5 0-.9.1-1.9.6-2.7.4-.7 1-1.3 1.8-1.4.3-.1.6-.1.9-.1.8 0 1.6.2 2.3.5.3-.5.8-.9 1.3-1.1.3-.1.7-.2 1-.2.4 0 .7.1 1.1.2.5.2.9.5 1.2 1 .4.4.6.9.6 1.5v.3c-.1.7-.4 1.3-.9 1.7-.5.4-1.1.7-1.8.7H23c-.6 0-1.3-.4-1.7-.8-.4-.5-.7-1.1-.7-1.8v-.1c-.6-.3-1.3-.5-1.9-.5h-.3c-.5 0-.9.4-1.1.8-.3.6-.4 1.4-.4 2.1 1.8.1 3.7.6 5.3 1.5 0 0 .1 0 .1.1.1-.1.2-.2.4-.3.5-.3 1.1-.5 1.7-.5.3 0 .5 0 .8.1.6.2 1.1.5 1.5 1 .4.4.7 1 .7 1.6zm-5.4-6s0 .1 0 0c0 .4.2.7.4.9.2.2.5.4.8.4h.1c.3 0 .6-.1.9-.4.2-.2.4-.5.4-.8v-.1c0-.3-.2-.6-.4-.9-.2-.2-.6-.4-.9-.4H23c-.3.1-.5.2-.7.4-.2.4-.3.6-.3.9zm-13.6 5c-.2-.1-.5-.2-.8-.2h-.1c-.4 0-.7.2-1 .4-.3.3-.5.6-.5 1v.1c0 .2.1.5.2.7.1.2.2.3.3.4.5-1 1.2-1.8 1.9-2.4zm16.1 4.5c0-.8-.3-1.7-.8-2.3-1-1.3-2.4-2.2-4-2.7-.3-.1-.6-.2-.9-.2-.9-.3-1.9-.4-2.8-.4-1.2 0-2.5.2-3.7.6-1.5.5-3 1.4-4 2.7-.5.7-.8 1.5-.8 2.3 0 .3 0 .6.1.9.2.7.5 1.3 1 1.8.4.5 1 1 1.6 1.3.1.1.3.2.4.2 1.7.9 3.6 1.3 5.4 1.3h1c1.9-.2 3.8-.7 5.4-1.9.5-.4.9-.8 1.3-1.3s.6-1.1.7-1.7c0-.2.1-.4.1-.6zm1.5-3.3c0-.2 0-.4-.1-.6-.1-.3-.3-.5-.6-.6-.3-.1-.6-.2-.8-.2-.3 0-.5.1-.8.2.8.7 1.4 1.4 1.8 2.4.1-.1.3-.3.3-.4.1-.3.2-.6.2-.8zm0 0\" fill=\"#FFFFFF\"></path></svg><svg height=\"10\" viewbox=\"4.699999809265137 8.300000190734863 22.599998474121094 15.40000057220459\" width=\"16\"><path d=\"M4.7 8.3v2.5L16 17l11.3-6.1V8.3H4.7zm0 3.7v11.7h22.6V12L16 18.1 4.7 12z\" fill=\"#FFFFFF\"></path></svg><svg height=\"14\" viewbox=\"87.43199920654297 227.56399536132812 422.6809997558594 382.7259826660156\" width=\"20\"><g><g><rect fill=\"none\" height=\"42.929\" width=\"42.929\" x=\"421.615\" y=\"375.172\"></rect><g><rect fill=\"none\" height=\"42.929\" width=\"42.929\" x=\"421.615\" y=\"375.172\"></rect><path d=\"M87.432,332.244v193.283h85.424v84.763h251.855v-84.763h85.402V332.244H87.432z M383.309,568.021H214.237 v-105.67h169.072V568.021z M464.543,418.101h-42.929v-42.929h42.929V418.101z\" fill=\"#FFFFFF\"></path></g></g><rect fill=\"#FFFFFF\" height=\"84.536\" width=\"253.609\" x=\"175.93\" y=\"227.564\"></rect></g></svg></span></div></div></body></html>","source":"seekingalpha","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Boeing: Negative Dreamliner Prospects</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBoeing: Negative Dreamliner Prospects\n</h2>\n\n<h4 class=\"meta\">\n\n\n2020-09-24 21:00 GMT+8 <a href=https://seekingalpha.com/article/4375970-boeing-negative-dreamliner-prospects><strong>Dhierin Bechai</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>SummaryBoeing 787 unit decreases still look strong.Underlying profit margins, however, have been eroded.Timeframe to recoup production costs has been extended and leveraged. It have been a very ...</p>\n\n<a href=\"https://seekingalpha.com/article/4375970-boeing-negative-dreamliner-prospects\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BA":"波音"},"source_url":"https://seekingalpha.com/article/4375970-boeing-negative-dreamliner-prospects","is_english":true,"share_image_url":"https://static.laohu8.com/5a36db9d73b4222bc376d24ccc48c8a4","article_id":"2069055032","content_text":"SummaryBoeing 787 unit decreases still look strong.Underlying profit margins, however, have been eroded.Timeframe to recoup production costs has been extended and leveraged. It have been a very interesting time for the Boeing (NYSE:BA) 787 and not in a positive way. A flurry of manufacturing issues was found that trace back to Boeing’s outsourcing practice for the program and demand for new jets has dried up, leaving the Boeing 787 at a vulnerable spot right at the time when the Dreamliner provided meaningful cash to navigate Boeing through the Boeing 737 MAX crisis. Recent changes to the production levels have significantly altered our expectations for the program where we can only conclude that further slips to the program will trigger multi-billion charges that will make the Boeing 737 MAX liabilities look small. In this analysis, we look at Boeing’s previous quarter performance as there have been quite some changes that have affected performance in the first half of the year and also will affect Boeing’s performance on the Dreamliner program going forward. Source: KOMO News Boeing reduces production Previously, I anticipated that Boeing would be reducing production to a level of eight aircraft per month starting in Q2 due to the pandemic. However, Boeing did end up accelerating the decrease in production from late 2020 to early 2020 and from a previously anticipated level of 12 aircraft per month to 10 aircraft per month, a level that earlier was envisioned to be hit in early 2021, and instead of hitting a production level of seven aircraft per month in 2022, the troubled jet maker will now hit a level of six aircraft per month a year earlier. So, what we are seeing is that the cuts are deeper and earlier which is hardly a good sign but does fit the depressed market for new aircraft.\n All of the above resulted in significant margin erosion as some of the efficiencies in the system are lost and Boeing even had to remove 100 aircraft from the accounting quantity that it uses to calculate average profits for the entire accounting block. That means that the high initial production costs are now spread over less aircraft and a set of 100 profitable aircraft has been removed from the accounting quantity. That means that the program margin is being squeezed from two sides. Deferred Balance For The Boeing 787 According to Boeing's data, the deferred balance for the Dreamliner program topped at $28.65B in Q2 2016 and our data shows that this happened at the 431st delivery. On average, for the first 431 deliveries, each delivery was roughly $66.5 million less profitable than the average assumed profit for the accounting block. In the second quarter of 2016, Boeing removed two test aircraft from the accounting block and reclassified them as R&D costs. As a result, the deferred balance dropped by roughly $1B. From an e-mail exchange with Boeing spokesman Doug Alder, we understood that the removal of the test aircraft from the accounting block led to the underlying assumed average profit per airframe to go up slightly, while the production costs of these aircraft were completely removed from the deferred production balance. The removal of the test aircraft, which were considered unsuitable for placement with customers, was a welcome de-risk. However, in order to get an accurate view of actual progress in zeroing out the deferred costs, which is the obvious target for Boeing here, it's needed to correct for the removal of the test aircraft from the accounting quantity. By doing so, we obtain the following graph: \n Figure 1: Accumulated deferred costs per quarter (Source: AeroAnalysis International) Figure 1 shows how the sum of the deferred balance and unamortized tooling and other non-recurring costs has increased over time but has started decreasing since 2016. Figure 1 already gives a pretty good visualization, and one can imagine how the trend would continue in the future. What can be seen is that the deferred balance clearly decreased for the 17th consecutive quarter. However, it’s worrisome that the curve seems to be flattening as demand for wide body jets has dried up. The deferred balance after 968 deliveries is $17.96B vs. $18.79B last quarter or $18.4 million per airframe compared to $19.4 million per delivered airframe in the last quarter. This marks a $831 million improvement. To make things more visible, the differences in the total deferred balance per quarter divided by the number of rolled out jets can be plotted. Figure 2: Boeing 787 deferred balance decrease per rolled out jet (Source: AeroAnalysis International) Note: Quarters with a block extension are marked purple, quarters with a block reduction are marked blue. Previously, we expressed the unit improvements in terms of delivered Dreamliner aircraft. When roll outs closely match the delivery figures that's not a problem. However, currently there exists a significant disjoint between loading and roll out figures on one hand and deliveries on the other hand. Therefore, using roll out figures are more reflective as it takes an actual roll out to burn off the deferred production balance. Figure 2 shows that the decrease in deferred balance per unit changed from minus $56.4 million per airframe in Q1 2014 to $36.1million in Q2 2020. Quarter over quarter, the deferred balance decrease per airframe improved by nearly $5.1 million per unit.\n So, we are currently seeing that on a unit and block level, production is still very profitable. However, on a program level Boeing cannot take on a lot of headwinds anymore and that could be problematic as the company is facing crucial decisions regarding the future of the Boeing 787. Figure 3: Accounting block Boeing 787 (Source: AeroAnalysis) Boeing has decreased the accounting block from 1,600 to 1,500 units. It took the company 393 deliveries to halt the rise in deferred balance. In the quarter after reaching this top, the company reclassified the costs incurred on early test frames that were later deemed unmarketable. This led to a lower deferred balance. If we add back this charge or deduct it over the entire range, which is more suitable, the actual top was at 431 deliveries with a deferred balance of $25.498B. Boeing has 532 units left to recoup the balance of $18B. Boeing still needs 24 sales to reach the 1,500 aircraft, which is the size of the accounting quantity. With the 525 aircraft that are yet to be delivered, Boeing needs to recoup $34.2 million per airframe on average on top of the average program margin to totally zero out the balance. Given that Boeing currently generates profits of ~36 million per airframe, the road toward zeroing out the deferred balance remains difficult, especially because the production rate is set to come down. The Boeing 787 family's discounted price label is in the $135 million range, which means that Boeing will need profit margins north of 20% on top of average assumed margins for the balance to zero out completely. Given that Boeing's best-selling wide-body jet, which operated in an almost unrivaled market space, the Boeing 777, has margins of 30%, the task at hand for BA seems to be doable but there's extremely little margin for any further slips.\n Conclusion In Q2, the deferred production balance per unit increased sequentially and that itself seems to be a sign that the unit costs despite lower production rates are still strong. However, it should be noted that production rate decreases have been accelerated while the reduced production rates mean that it will take Boeing longer to burn off the balance. Overall, while the unit figures do not show it (yet), the space to reduce the deferred production balance to zero has become significantly tighter for Boeing due to the combination of accounting block contraction and potential losses of gains in the production system due to lower production volumes. *Join The Aerospace Forum today and get a 15% discount*The Aerospace Forum is the most subscribed-to service focusing on investments in the aerospace sphere, but we also share our holdings and trades outside of the aerospace industry. As a member, you will receive high-grade analysis to gain better understanding of the industry and make more rewarding investment decisions.\nDisclosure: I am/we are long BA, EADSF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.","news_type":1},"isVote":1,"tweetType":1,"viewCount":743,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"CN","currentLanguage":"CN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":25,"xxTargetLangEnum":"ZH_CN"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/974107141"}
精彩评论