Boeing has added another nine aircraft to the growing 787 inventory which now stands at around 51 aircraft. As long as 787 remains grounded, Boeing is faced with the choice of either slowing production or building physical inventory. The cash drag on Boeing is now a serious matter and is building, which UBS estimates to be in the $6bn range.
"We estimate every missed 787 delivery adds $100-120M to our baseline forecast for a $6bn 787 cash burn,” UBS noted.
During the fourth quarter, 787 unit cost is estimated at $218 million, down from $232 million in the third quarter, although well above the $190 million level that would have helped Boeing pacing to its 787 cash flow guidance. Operating cash flow in the fourth quarter was $4.2bn, with free cash flow totaling $3.7bn. Cash and investments in marketable securities totaled $13.5bn at year-end, up from $11.2bn at the beginning of the quarter.
787 unit production costs will need to fall if Boeing expects to meet its forecast of low single- digit margins on its initial 1,100 787 aircraft.
Boeing troubles - update
