Boeing Co. (NYSE:BA)

The financial data reveals several critical trends related to profitability, cost of capital, invested capital, and economic profit over the five-year period analyzed.

Net Operating Profit After Taxes (NOPAT)

The NOPAT figures demonstrate consistent negative results throughout the period, indicating operating losses each year. There was a significant improvement from 2020 to 2023, with losses decreasing from -8,306 million to -77 million US dollars. However, in 2024, the losses sharply increased to -10,234 million US dollars, marking a substantial deterioration in operating profitability compared to the preceding years.

Cost of Capital

The cost of capital has shown a steady upward trend from 13.5% in 2020 to a peak of 15.29% in 2023, slightly declining to 15.16% in 2024. This increase suggests a rising hurdle rate for investment returns, reflecting either heightened risk perceptions, increased financing costs, or both, over the evaluated period.

Invested Capital

Invested capital started at 47,630 million US dollars in 2020, followed by a gradual increase to 50,833 million in 2022. There was a notable decline in 2023 to 44,883 million, before rising again to 50,250 million in 2024. The fluctuation indicates adjustments in asset base or capital expenditures, with potential implications for operational capacity and strategic asset management.

Economic Profit

Economic profit remained deeply negative across all years, signaling that the returns generated were insufficient to cover the cost of capital. Although there was some improvement from -14,736 million in 2020 to -6,940 million in 2023, the economic profit sharply worsened to -17,850 million in 2024. This reflects a period of persistent value destruction, which worsened significantly in the final year, likely due to the combination of increased losses and a high cost of capital.

Overall, the data indicates a challenging financial landscape characterized by sustained operating losses and economic value destruction. While there was some operational improvement between 2020 and 2023, the sharp decline in 2024 raises concerns regarding the underlying business performance and cost management relative to capital employed.

The analysis of the financial performance over the periods reveals fluctuating net losses and net operating profits after taxes (NOPAT) attributable to Boeing shareholders. Both metrics exhibit substantial variability, indicating challenges in sustaining profitability.

Net Loss Attributable to Boeing Shareholders

The net loss started at a high level of -11,873 million US dollars at the end of 2020. It improved considerably in 2021, reducing to -4,202 million, and then remained relatively stable yet negative at -4,935 million in 2022. Further improvement occurred in 2023, with the net loss decreasing to -2,222 million, suggesting a positive trend towards lower losses. However, this favorable trajectory reversed sharply by the end of 2024, with net loss escalating back to -11,817 million, nearly returning to the 2020 magnitude. This indicates renewed financial difficulties or one-time charges impacting the results in 2024.

Net Operating Profit After Taxes (NOPAT)

NOPAT followed a similar pattern to net loss, starting at -8,306 million US dollars in 2020. It improved significantly through 2021 and 2022, reaching -2,649 million and -2,910 million respectively, reflecting reduced operating losses. By 2023, NOPAT almost breakeven at -77 million, suggesting nearly neutral operating profitability. However, in 2024, the measure deteriorated sharply to -10,234 million, indicating a substantial decline in operating performance and severe negative profitability in that year.

Overall, the data reflects a cyclical pattern with temporary improvements in operating and net losses through 2021 to 2023, followed by a marked deterioration in 2024. The sharp increase in losses during the most recent period highlights significant operational or market challenges that need to be addressed to restore financial stability and profitability.

The financial data reveals fluctuating trends in both income tax expense (benefit) and cash operating taxes over the five-year period ending December 31, 2024.

Income Tax Expense (Benefit)

This item exhibits significant variability throughout the period. In 2020, a substantial tax benefit is seen with a negative value of -2535 million US dollars. The benefit decreases in magnitude in 2021 to -743 million and then transitions to a small positive tax expense of 31 million in 2022. The expense increases further to 237 million in 2023, before again shifting to a tax benefit of -381 million in 2024. This pattern indicates inconsistent tax charges, possibly reflecting changes in profitability, tax regulations, or adjustments in deferred tax assets and liabilities.

Cash Operating Taxes

Cash operating taxes also display considerable variation, but with a distinct pattern compared to income tax expense. In 2020, there is a significant tax benefit of -3337 million US dollars. This value reverses direction in subsequent years, with positive cash taxes of 676 million in 2021, then slightly decreasing to 588 million in 2022. The cash tax outflows increase to 736 million in 2023, before declining to 508 million in 2024. The overall trend suggests initial tax credit or refund receipt in 2020, followed by consistent cash tax payments in later years, albeit with some fluctuation.

In summary, the data portrays a volatile tax environment with marked fluctuations between tax benefits and expenses, as well as cash tax payments over the analyzed period. The initial years show net tax benefits, while the subsequent years reflect more traditional tax expense and cash outflows, indicating changes in earnings or tax management strategies.

The financial data reveals notable trends in debt, shareholders' equity, and invested capital over the five-year period ending in 2024.

Total reported debt & leases

There is a general decline observed in the total reported debt and leases. Beginning at approximately $64.9 billion in 2020, the amount decreases steadily to about $54.1 billion in 2023, followed by a slight increase to $55.9 billion in 2024. This trend indicates an overall effort to reduce debt obligations over the period, with a minor uptick in the most recent year.

Shareholders’ deficit

The shareholders’ deficit shows significant volatility during the timeframe. Starting from a deficit of $18.3 billion in 2020, the figure improves to $15.0 billion in 2021, worsens again to $15.9 billion in 2022, and further deteriorates to $17.2 billion in 2023. However, there is a remarkable improvement in 2024 when the deficit reduces substantially to $3.9 billion. This sharp recovery in 2024 suggests a significant positive development in equity, potentially reflecting operational improvements or revaluation effects.

Invested capital

Invested capital increases gradually from $47.6 billion in 2020 to a peak of $50.8 billion in 2022. In 2023, a noticeable decline occurs, bringing invested capital down to $44.9 billion. Subsequently, it rebounds to $50.3 billion in 2024, almost reaching previous highs. This pattern implies fluctuating investment activities or asset base adjustments that may correlate with the trends in debt and equity.

In summary, the period is characterized by a deliberate reduction in debt levels with some recent increase, a highly volatile but ultimately improving shareholders’ deficit mainly in the last year, and a fluctuating invested capital base with recovery in the final reported period. These developments collectively indicate a dynamic financial position with potential strategic changes affecting capital structure and equity standing towards the end of the period.

Economic profit

The economic profit shows a negative trend across the periods, indicating persistent economic losses. The value improved from -14,736 million US$ in 2020 to -6,940 million US$ in 2023, suggesting a reduction in losses over that timeframe. However, in 2024, economic profit sharply deteriorated to -17,850 million US$, the lowest in the period analyzed, signaling a significant setback.

Invested capital

The invested capital increased steadily from 47,630 million US$ in 2020 to 50,833 million US$ in 2022. In 2023, it declined notably to 44,883 million US$, before rising again to 50,250 million US$ in 2024. This fluctuation suggests some reduction in investment or asset base in 2023, followed by renewed investment activity or asset growth the following year.

Economic spread ratio

The economic spread ratio remains consistently negative throughout the periods, reflecting that the return on invested capital was below the cost of capital. The ratio improved from -30.94% in 2020 to -15.46% in 2023, indicating better efficiency or profitability in those years. However, in 2024, the ratio declined sharply to -35.52%, correlating with the sharp drop in economic profit, thus confirming deteriorating performance and value destruction in that year.

Summary

Overall, the data reveals that despite some improvement in economic profit and economic spread ratio up to 2023, the company experienced significant deterioration in 2024, with worsened losses and decreased returns relative to capital costs. Invested capital showed modest growth with a dip in 2023, but returned to near prior levels in 2024. The negative economic spread ratio throughout the period indicates ongoing challenges in generating returns above the cost of capital, culminating in a notable decline in 2024 performance indicators.

The economic profit demonstrates significant fluctuations over the analyzed period. Beginning with a substantial negative value of -14,736 million US dollars in 2020, it improves to -9,595 million in 2021. However, this improvement is short-lived, as economic profit decreases again to -10,598 million in 2022 before improving in 2023 to -6,940 million. In 2024, there is a notable deterioration to -17,850 million, indicating an increased loss compared to previous years.

Revenues show a generally positive trend from 2020 to 2023, increasing from 58,158 million US dollars to 77,794 million US dollars. This steady growth suggests expanding sales or operations during this period. However, in 2024 revenue declines significantly to 66,517 million US dollars, indicating a potential contraction or other challenges affecting sales performance.

The economic profit margin varies in line with economic profit, reflecting considerable negative values throughout. It improves from -25.34% in 2020 to -8.92% in 2023, signaling a temporary reduction in losses relative to revenue during these years. Yet, in 2024, the margin worsens sharply to -26.84%, showing an increased loss as a percentage of revenue, even compared to the starting point in 2020.

The simultaneous worsening of economic profit and economic profit margin in 2024 despite relatively high revenue levels may indicate rising costs, inefficiencies, or other financial pressures negatively impacting profitability. The interim improvements between 2020 and 2023 suggest that operational or cost management initiatives might have been effective temporarily, but these benefits were not sustained into 2024.