Rolls-Royce secures extra viral flying time 6 Apr 2020 The aero engine maker axed its 2019 dividend and borrowed an extra 4 bln pounds. That buys it time to cope with grounded planes which are costing it 50 mln pounds a week. Its key market, long-haul flights, may be the last to recover. But Rolls should have enough cash in the tank.
Rolls-Royce takeoff requires disbelief suspension 28 Feb 2020 The engineer made a $1 bln operating loss after issues in its aerospace arm. Shares rose after CEO Warren East said charges related to the Trent 1000 engine were now mostly over. To hit a $1.3 bln free cash flow target, investors used to bruising one-offs must take his word.
Virgin’s galactic valuation 26 Feb 2020 Richard Branson’s space-tourism enterprise is worth nearly $7 billion. That’s high even based on the company’s rosy projections, and it’s stratospheric on more realistic assumptions.
BAE’s U.S. pivot can help defuse Saudi discount 20 Jan 2020 The $27 bln UK defence firm has bought satellite navigation and radio businesses from merger partners Raytheon and United Technologies. The $2.2 bln price looks fair. Greater sales in America, and a lesser reliance on Riyadh, should boost the Typhoon-maker’s depressed stock.
Larry Culp’s mission: be GE’s least memorable CEO 30 Oct 2019 GE is leaner and less indebted. Its jet and health divisions grew in the third quarter and cash flows are improving. Culp’s predecessors specialized in big gestures. If he can just keep GE on a stable path, with fewer one-offs and write-downs, he’ll be its best chief in decades.
Boeing CEO’s mea culpa is too backward looking 29 Oct 2019 Dennis Muilenburg expressed contrition to U.S. senators, and offered a decent account of how Boeing corrected problems that contributed to 346 deaths. He was less reassuring on Boeing’s remaining flaws, such as its cozy relationship with regulators and sub-optimal governance.
Boeing CEO is flying into even worse turbulence 23 Oct 2019 Dennis Muilenburg still has no fix for the 737 MAX after two crashes and the firm will slow 787 production. The company is burning cash, borrowing heavily, may face a credit-rating cut yet is still paying dividends. It leaves him exposed as he heads for a grilling in Congress.
The Exchange: A new space race 14 Oct 2019 Fifty years ago, NASA landed the first people on the moon. Today, billionaires like Elon Musk and Jeff Bezos are blasting satellites into space to boost global internet coverage. Adrian Steckel of SoftBank-backed OneWeb explains why there’s a brewing gold rush in low-earth orbit.
The Exchange: Matthew Putman 30 Sep 2019 The factory floor may be an odd place to find a musical virtuoso. But the founder of Nanotronics, a near-unicorn on the Brooklyn waterfront with Peter Thiel on its board, is as comfortable tinkling the ivories as he is tinkering with the complexities of process automation.
Defence deal puts post-Brexit UK in crosshairs 18 Sep 2019 The government is reviewing the $5 bln acquisition of Cobham by U.S. buyout group Advent. The aviation contractor’s investors already approved it, and national security concerns are spurious. Blocking the sale would imply Britain’s post-Brexit future is more closed than open.
UK defence buyout is Exhibit A for cash glut 25 Jul 2019 Private-equity firm Advent and Blackstone funds are buying Cobham for 4 bln pounds, larding up to 2.5 bln pounds of leverage onto a company that has worked hard to have essentially none. It suggests both equity and debt investors have plenty of money and limited opportunities.
Branson’s space deal defies financial gravity 9 Jul 2019 The bearded billionaire is selling half his cosmic travel group to former Facebook executive Chamath Palihapitiya’s blank-check vehicle. A $1.5 bln valuation looks rich given Virgin Galactic’s record of two test flights. Still, it needs cash, and Palihapitiya has too much of it.
Viewsroom: When dealmaking gets difficult 13 Jun 2019 Raytheon and United Technologies’ planned $114 bln tie-up raises questions about strategy, cost cuts and executive overreach. It’s prompted their shares to tank and activist Bill Ackman to oppose it. And Fiat Chrysler and Renault’s mooted merger has crashed. Can they salvage it?
Raytheon can home in on better deal 10 Jun 2019 The $52 bln maker of Patriot missiles is bringing a near-pristine balance sheet and better operating margin to a merger that seems to benefit partner UTC more. A tie-up could be attractive as defense budgets slow, but Raytheon has room to seek better terms, or bide its time.
UTC plunges into some hasty M&A aerobatics 10 Jun 2019 The aerospace group plans to fuse with $52 bln defense firm Raytheon, months after it closed another large deal and while in the middle of a breakup. Even if UTC can convince investors that the merger makes sense, it may be wiser to wait until its own re-engineering is complete.
Airbus struggles to profit from Boeing misery 30 Apr 2019 The European planemaker is wary of ramping up output despite its U.S. rival’s 737 MAX problems. Avoiding a price war may be one reason and airlines have yet to commit to switching suppliers. Without firm orders, investing in more production would squeeze free cash flow further.
SpaceX-Amazon satellite race pits speed vs. cash 23 Apr 2019 Elon Musk’s firm hopes to soon start launching thousands of satellites for a global broadband network. Jeff Bezos also eyes the prize, and his outfit has deeper pockets. Yet regulatory and technological glitches are likely, and demand uncertain. Losses could be out of this world.
Crash report clarifies Boeing’s 737 exposure 29 Mar 2019 Officials think a suspect anti-stall system activated before last month’s airliner crash in Ethiopia, the WSJ reported. That raises the plane-maker’s legal liability. But it also makes it clearer how to fix the problem and get the bestselling jet back in the sky.
Hadas: Boeing undermined by too-positive thinking 27 Mar 2019 The aircraft maker’s hasty introduction of new software may have led to two fatal crashes. If so, the problem was probably not greed or lack of concern for safety, but something just as dangerous: overconfidence. As global banks learned in 2008, the worst sometimes does happen.
Airbus can only nibble at Boeing’s 737 lunch 18 Mar 2019 Logically, the U.S. aerospace giant’s problems with the ill-fated MAX 8 should benefit its arch European rival. But chock-full order books and production mean Airbus will struggle to take up the slack. If the MAX 8 faces long-term problems, it could just mean fewer planes.