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Boeing 10-12 00:42 GMT
(Comment)
Late on a Friday afternoon before a holiday weekend, Boeing released some preliminary third quarter...
Earnings by Carol Levenson, CFA
Late on a Friday afternoon before a holiday weekend, Boeing released some preliminary third quarter results (the company is scheduled to report its third quarter results on October 23). The company expects to report a loss of $9.97/share, or about $6.2 billion. This implies that it suffered significant losses before special items. Reported results include a total of $5 billion in pretax charges arising from a further delay in the 777x program, the termination of the 767 program, and additional cost overruns in several fixed price development contracts. The loss also reflects the actual and anticipated impact of the IAM strike. Bear in mind, the strike only affected the last couple of weeks in the quarter, and Boeing was still delivering planes in September, a total of 116. The cash drain has undoubtedly worsened since then. In addition, the company has decided to "reset" its workforce by laying off 10% of its employees, including executives and managers. Charges and anticipated savings for this were not disclosed today, but there likely will be cash outlays involved. The layoffs will replace the next round of planned furloughs. If there is good news in any of this, it can be found on the cash flow statement. For starters, the $5 billion in pretax charges are likely to be noncash for now. Furthermore, the operating cash outflow was only $1.3 billion, a dramatic improvement over the $3.9 billion outflow in the second quarter. Although Boeing, importantly, did not disclose its debt balance (which could have affected its cash balance), its cash balance ($10.5 billion) fell "only" $2.1 billion during the quarter, which is slightly more than our estimate for negative free cash flow of $1.7 billion. Are these actions and disclosures supposed to scare the IAM into a more accommodating bargaining stance? Unknown. More likely, they reflect a reality management was forced to accept when it closed its books for the third quarter. Moreover, if the company does indeed plan to raise equity, as has been reported, it will need to disclose as much as possible as soon as possible. Facing the music is always an encouraging development. Apart from the positive effect of potentially it more feasible to issue equity, we don't see a material credit profile impact from today's news.
Ecopetrol S.A. 10-11 09:45 GMT  
(Report with Analyst's Data Sheet) 
On Tuesday, Ecopetrol S.A. (ECOPET) announced a bond sale of $1.75 billion for a long 7-year senior unsecured note maturing on 02/01/2032 at a yield of...
CEO Probe Minimal Impact by Franck Bekaert
Berry Plastics Corporation 10-11 09:41 GMT  
(Report with Analyst's Data Sheet) 
Berry Global Group (BERY) is promising both shareholders and bondholders some upside upon closing of the planned spinoff transaction...
Financial Engineering by Kim Noland
Halliburton 10-11 09:37 GMT  
(Report with Analyst's Data Sheet) 
Investors will find out if the contraction in the North America market moderated when Halliburton Company (HAL) reports third quarter results on November 7...
North America Remains A Drag by T.L. Tsang, CFA
PNC Financial Services Group 10-11 09:35 GMT  
(Report with Analyst's Data Sheet) 
PNC's (PNC) diversified operating platform, a credible management team with a proven track record of effective execution around core...
No Longer Waiting For Godot (Loan Growth) by Mark Flanagan, CFA
HP Inc. 10-11 09:31 GMT  
(Report with Analyst's Data Sheet) 
Earlier this week market research firm IDC reported that PC shipments fell 2.4% in the third quarter.  According to its figures HP Inc., with a market share of 20%,...
AI Impact Minimal Thus Far by Dave Novosel, CFA
Roblox Corp 10-10 15:45 GMT
(Comment)
Shares of Roblox are lower and their bonds have declined about 2 points to a recent price of 91...
Rumor by Stuart Novick, CFA
Shares of Roblox are lower and their bonds have declined about 2 points to a recent price of 91 after a short report alleged that the provider of online gaming and entertainment was inflating its user numbers and has done little to protect younger users from exposure to adult content. As we noted when we initiated coverage in August, several lawsuits with similar claims had been filed against the company in the past, with the company modifying algorithms and tightening parental controls in response. Management has refuted these recent allegations as well, claiming that the platform is safe and reiterated its confidence in its usage and financial metrics. In the meantime, Roblox's reported cash of $2.4 billion is well in excess of its $1 billion in debt so there doesn't appear to be any immediate concern with regard to the bonds due in 2030. The company is due to report its third quarter results the morning of Halloween.
Falabella 10-10 09:39 GMT  
(Report with Analyst's Data Sheet) 
We review our assessment of Falabella S.A. (BFALA). This week, the company's stock price hit its highest level since early 2020. The stock price has doubled since...
Renaissance by Alexandre Dray
Air Products 10-10 01:31 GMT  
(Report with Analyst's Data Sheet) 
Last Friday, the Wall Street Journal reported that activist investor Mantle Ridge had built a $1 billion stake in Air Products (APD) and speculated that it...
Activist Tries To Clear The Air by Jay Cushing, CFA
Victoria's Secret & Co. 10-10 01:25 GMT  
(Report with Analyst's Data Sheet) 
Victoria's Secret's (VSCO) fiscal second quarter adjusted operating income increased year over year for the first time since fiscal 2021. In...
Calendar Shift Benefit by Evan Mann, CFA
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