Boeing’s new share buyback after delivering record number of aircraft
Boeing, after enjoying a surge in revenue and cash as it ramps up
commercial jet production, with a target of delivering a record 635 to
645 aircraft this year, raised the company dividend by about 50 percent
and approved USD$10 billion in a new share buyback. The company is also
preparing to invest billions of dollars in two new models, the
narrow-body 737 MAX and the wide-body 777X.
The increased payouts come as the company tries to clinch a contract with its machinists that would ensure the 777X is built in the Seattle area. The 31,000 local union members have rejected Boeing’s offer, largely because it means a switch from their current defined-benefit pension plan.
The share repurchase represents about 10 percent of Boeing’s outstanding stock.
The increases in dividends and share repurchases “reflect sustained, strong operational performance by our businesses, increasing cash flow, and our confidence in the future,” Boeing chief executive Jim McNerney said in a statement.
The new repurchase amount adds to about USD$800 million remaining from the company’s 2007 stock repurchase authorisation, and buying will begin in 2014, Boeing said. The quarterly dividend is 73 cents per share, up from 48.5 cents. Those gains help offset declining US military spending, which is hampering Boeing’s defence businesses.
“Boeing is looking forward to a period of long-term financial stability made possible primarily by the men and and women of District 751,” said Tom Wroblewski, president of the International Association of Machinists, District 751, which represents the Seattle-area workers.
For investors, the rise in returns “speaks to the belief that the company has line of sight to improving its operating performance,” said Howard Rubel, an analyst at Jefferies.
The increased payouts come as the company tries to clinch a contract with its machinists that would ensure the 777X is built in the Seattle area. The 31,000 local union members have rejected Boeing’s offer, largely because it means a switch from their current defined-benefit pension plan.
The share repurchase represents about 10 percent of Boeing’s outstanding stock.
The increases in dividends and share repurchases “reflect sustained, strong operational performance by our businesses, increasing cash flow, and our confidence in the future,” Boeing chief executive Jim McNerney said in a statement.
The new repurchase amount adds to about USD$800 million remaining from the company’s 2007 stock repurchase authorisation, and buying will begin in 2014, Boeing said. The quarterly dividend is 73 cents per share, up from 48.5 cents. Those gains help offset declining US military spending, which is hampering Boeing’s defence businesses.
“Boeing is looking forward to a period of long-term financial stability made possible primarily by the men and and women of District 751,” said Tom Wroblewski, president of the International Association of Machinists, District 751, which represents the Seattle-area workers.
For investors, the rise in returns “speaks to the belief that the company has line of sight to improving its operating performance,” said Howard Rubel, an analyst at Jefferies.
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