Boeing has received positive news as S&P Global Ratings announced it would no longer consider downgrading the aircraft manufacturer to junk status, alleviating fears of increased borrowing costs. After a tumultuous 2024, marked by financial losses and production challenges, including a significant strike and quality issues, Boeing raised over $24 billion in equity. With a cash balance of $23.7 billion, the company is predicting a profitable year, especially with increased production of the 737 Max, which is crucial for its financial recovery.
"The key to cash generation will be continued progress on the 737 Max ramp," Boeing CEO Kelly Ortberg said in an earnings call last Wednesday. He added that it is currently producing a number in the low 30s, but expects to reach the cap of 38 over the next few months. By the end of the year, Boeing plans to ask the FAA to increase this to 42.
S&P had put Boeing at risk of a downgrade in October, but has now stated it is no longer considering a downgrade to junk status, citing positive changes.
Boeing reported a cash balance of $23.7 billion at the end of the first quarter - a positive sign after hemorrhaging money throughout a testing 2024.
S&P also cited the planemaker's deal to sell portions of its aviation-software business to private equity firm Thoma Bravo, which is expected to raise $10 billion.
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