From this article, you will learn about:
- The history of the Boeing Company;
- The most important Boeing projects;
- Financial indicators of Boeing;
- Whether it is worth investing in Boeing.
The Boeing Company is renowned not only for its aircraft. Boeing is a major producer of military equipment, satellites, and telecommunications equipment. Boeing produces as much military product as it does aircraft. For instance, in 2020, Boeing became the third-largest manufacturer of military equipment in terms of revenue. Boeing is also the largest exporter in the USA. In recent years, there has been increasing skepticism and criticism of the company. In this article, we will attempt to answer the question of whether it is worth investing in the company.
Future Boeing was founded in 1916 and the company was originally named Pacific Aero Products Company. The company's first major and successful project was the Boeing Modec C. It was a seaplane. In the interwar period Boeing B-17 Flying Fortress which became one of the most successful airplanes of World War II.
The post-war years Boeing had some problems due to which the company went through layoffs and restructuring, but eventually returned to designing and manufacturing both civilian and military aircraft. One of the company's biggest successes was the Boeing 707. Also in 1969, the development of the Boeing 747, the most successful passenger airliner in history, ended. This airplane cemented Boeing's leadership in civil aviation.
In the late 20th and early 21st century, Boeing continued to develop and produce new airplane models, including the Boeing 777 and Boeing 787 Dreamliner, which represent advanced technology and passenger comfort. It is also developing military airplanes and systems. We will focus on these in more detail below, as Boeing is one of the top 5 contractors in terms of the size of its contracts with the U.S. Department of Defense and revenues from this account for a significant portion of the company's profits.
Boeing's Military Projects
The F/A-18E/F Super Hornet by Boeing is a multi-purpose fighter designed specifically for aircraft carrier strike groups. It is one of the main aircraft of the US Navy's carrier-based disposition and is constantly being improved and upgraded to maintain its effectiveness.
Another project by the company is the KC-46 Pegasus. Boeing designed and built the KC-46 Pegasus as a next-generation aerial refueling tanker for the US Air Force. It is intended to replace the aging KC-135 Stratotanker and has enhanced refueling capabilities.
The Boeing P-8 Poseidon is a maritime patrol and reconnaissance aircraft designed and built by Boeing for the US Navy. It is based on the commercial airliner Boeing 737 and is used for anti-submarine warfare, surface warfare, as well as intelligence, surveillance, and reconnaissance (ISR). Along with other military projects by Boeing, this is considered one of the most successful.
The AH-64 Apache helicopter by Boeing is a well-known attack helicopter used by the US Army and many other countries. Over the years, various versions of the Apache have been developed and upgraded, enhancing its combat capabilities. It is now considered one of the best attack helicopters in the world, with some experts acknowledging it as the best. The AH-46 has proven itself in Afghanistan, Iraq, and the Gaza Strip.
The CH-47 Chinook by Boeing is a heavy helicopter providing transport and cargo capabilities for the American armed forces and numerous international customers. Modern variants of the Chinook continue to be produced and upgraded.
Boeing is involved in military space programs, including satellite development, launch services, and space exploration. For example, Boeing is the prime contractor for the U.S. Air Force's Evolved Expendable Launch Vehicle (EELV) program.
Boeing continues to work on advanced military projects such as the development of the T-7 Red Hawk trainer aircraft and participation in programs such as the Ground-Based Strategic Deterrent (GBSD), which is designed to replace the Minuteman III intercontinental ballistic missile.
Boeing's Civil Aviation Projects
The Boeing 777, often referred to as the "Triple Seven", is a long-range, wide-body, twin-engine jet airliner. It was first introduced in the mid-1990s, but has since undergone various improvements and upgrades. The most common models are the 777-200, 777-200ER, 777-300, 777-300ER, and the ultra-long-range 777-200LR and 777-300ER.
What are the advantages of the Boeing 777?
The 777 was one of the first commercial airplanes to demonstrate the viability of long-range, twin-engine aircraft, resulting in significantly improved fuel efficiency and lower operating costs than four-engine aircraft.
The Boeing 777 was also one of the first commercial airplanes to make extensive use of lightweight composite materials in its design, resulting in reduced weight and improved fuel efficiency.
Over the years, Boeing has introduced several upgrades and new variants, including the 777X, which comes in two versions, the 777-8 and 777-9. The new generation 777X models feature improved aerodynamics, new engines, and a redesigned cabin.
The Boeing 777 is popular with airlines on long-haul routes due to its range, passenger capacity and efficiency. It competes with the Airbus A330 and A350 family of airplanes.
What is the Boeing 787?
The Boeing 787, known as the Dreamliner, is a long-range, wide-body, twin-engine jet airplane first introduced in 2011. It represents a significant advancement in design and technology. There are many innovations in the Boeing 787. The following are the key ones.
The 787 features extensive use of composite materials in its design, making it lighter and more fuel efficient than traditional aluminum-based aircraft. Also Boeing 787 has advanced aerodynamics The Dreamliner airplane features advanced aerodynamic and propulsion technologies that further improve fuel efficiency and reduce noise.
What are the market successes of the Boeing 787? The Boeing 787 has been well received by airlines, and its fuel efficiency and passenger comfort have made it a popular choice for long-haul and intercontinental routes. It competes with the Airbus A350.
Investing in Boeing
It is necessary to mention upfront that investing in Boeing is currently considered a highly questionable idea despite a large number of major projects. The expected income this year is $18.1 billion, which is more than four times less compared to 2022, in which the company's profit was $66.8 billion. The debt-to-equity ratio stands at -3.125, a very poor indicator, suggesting that Boeing's debt is more than three times its equity. Boeing's annual free cash flow in 2022 was $2.325 billion, which is 160.12% less than in 2021. Other key financial indicators also suggest a low margin of safety for Boeing and a lack of prospects for at least the near future.
According to the quarterly report on Boeing's website, the company's net profit for the last quarter increased by 55.97%. Other financial indicators are also improving, which is not surprising, as the company continues to work on a large number of major projects, providing it with a significant safety margin. However, Boeing has not fully recovered from the lockdowns during Covid. The company is not even suitable for investors who prefer value investing and are looking for undervalued companies. As of November 2023, the P/E ratio remains at 0. But other indicators suggest that the company is not performing very well.