Boeing Cuts 777 Production, But Boosts Dividend and Buyback

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December 13, 2016 8:58am NYSE:BA

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Aerospace and defense giant Boeing Co (NYSE:BA) this morning announced a massive dividend boost as well as a new share buyback plan amid lower 777 production.


The Seattle-based company upped its quarterly dividend payout by 30%, from $1.09 per share to $1.42. The new dividend will be paid on March 3, 2017 to shareholders of record as of Feb. 10, 2017. Boeing has now raised its dividend by 190% over the past four years.

As a result of the dividend boost, BA’s new dividend yield rises to a healthy 3.6%.

Additionally, the company announced a new $14 billion stock repurchase plan. The new buyback program will replace its prior $14 billion plan, which was about halfway complete after BA bought back around $7 billion worth of its own shares this year.

Finally, Boeing said it would cut production on its flagship 777 Dreamliner down to about 5 planes per month, from a prior level of 8.3 per month. That lower production will likely be accompanied by some job losses as well.

Boeing commented via press release:

“As our team delivers on our large and diverse order backlog, and drives greater efficiency across our business, Boeing is well positioned to generate increasing cash flows and meet our commitment to provide competitive returns to our shareholders. At the same time, Boeing is continuing to invest in our people, innovation and growth as part of a balanced cash deployment strategy,” said Boeing Chairman, President and Chief Executive Officer Dennis Muilenburg.

Boeing shares rose $2.62 (+1.67%) to $159.78 in premarket trading Tuesday. Year-to-date, BA has gained 8.68%, versus a 10.98% rise in the benchmark S&P 500 during the same period.

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