Boeing Jet Deliveries Free Cash

Company’s free cash flow may double over next three years, paving the way for a bigger dividend or buybacks.

Boeing Co., after investing heavily in new jet designs, may see free cash flow as much as double during the next three years to $18 billion, raising the prospect of bigger dividends or stock buybacks.

A record backlog of commercial-jet orders is setting up Boeing for a surge in cash as the Chicago-based planemaker cranks up production and trims spending for aircraft development programs such as the 787 Dreamliner.

Sweet Spot

Boeing hasn’t been in this kind of sweet spot since the late 1990s, after the 777’s 1995 debut. As the 787 fell more than three years behind schedule before entering service in 2011, and as the investment in the plane rose to what Arment estimated is about $20 billion, Boeing halted buybacks and left the dividend unchanged.

Buyback History

The planemaker’s last share-repurchase announcement was for $7 billion in October 2007, and Boeing spent only $3.4 billion and has $3.6 billion pending in the program. In the previous three years, Boeing had spent $8 billion on buybacks, according to a 2007 company statement.

777 Overhaul

An overhaul of the wide-body 777, for which airlines have been clamoring, probably will involve new engines and composite-plastic wings. That plane probably will come after a stretched version of the Dreamliner, Albaugh told reporters at a briefing in Beijing on June 11.

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