Boeing has gushed cash quarter after quarter for more than four years, sending its share price soaring yet leaving some analysts suspicious about how Boeing manages always to surpass Wall Street's cash flow expectations.
Inside the company, too, some are uncomfortable with the financial engineering that Boeing uses to consistently beat cash flow projections, often by $1 billion and sometimes $2 billion.
Boeing struggled all last summer to complete the 737s pouring out of its Renton factory as catch-up assembly work and shortages of engines kept it from delivering the planes and collecting its cash. Yet analysts were astounded when it unveiled its financial results in October.
"Boeing pulled off another 'Houdini moment,' with ... an explosive 34 percent jump in cash flow," analyst Jim McAleese wrote about the $4.6 billion the company said its operations generated.
The factory situation improved in the year's final quarter, though 2018 ended still slightly short on airplane deliveries. When Boeing reported its results Jan. 30, it posted almost $3 billion in quarterly cash flow -- shy of the rosiest projections but enough to seal a full-year record total of $15.3 billion. Boeing's stock price has since risen dramatically, up 11 percent to $405.
How does the company manage these "Houdini" moments?
The tricks it uses are mundane in procedure, but huge in scale. They amount to various ways of pulling forward cash receipts from airline customers -- bringing in cash that's due in the future just ahead of the end of the quarter -- or pushing out the payment of accounts to suppliers into the next quarter.
While many companies can massage their cash-flow results, few have as much leeway to do so as Boeing. That's because aircraft purchases involve such large sums, on payment schedules that are negotiable and adjustable.
And the process is entirely opaque from the outside because the precise financial terms of jet sales are never disclosed.
Past reports from financial analysts point to very large amounts of cash involved.