Boeing raises dividend 20%, sweetens buyback

By BLOOMBERG

CHICAGO • Boeing Co is handing out more goodies to investors already flush from the company’s leap to the top of the Dow Jones Industrial Average — all while plotting its biggest investment since the 787 Dreamliner more than a decade ago.

The quarterly dividend will rise 20% to US$1.71 (RM6.98) a share, Boeing said in a statement on Monday, surpassing analyst expectations. Directors also authorised US$18 billion in share buybacks, up from a US$14 billion programme they put in place a year ago.

CEO Dennis Muilenburg is making good on a promise to return cash gains to shareholders as the carbon composite Dreamliner has become a rainmaker over the past year, ending years as a cash drain. The planemaker is also speeding factory output as it tries to profit from a record order backlog, which provides a cushion from the cyclical market swings that have hurt other industrial giants such as General Electric Co.

The strategy is nearing its biggest test yet as a major potential investment looms. Boeing directors are studying whether to move forward with their first all-new jetliner since the 787, which saddled the company with US$30 billion in deferred costs after its tardy debut. Development costs for the proposed new plane would probably run between US$10 billion and US$15 billion, said aerospace analyst Richard Aboulafia.

The shares climbed 1.3% to US$286.90 after the close of regular trading in New York yesterday. Boeing has outpaced Apple Inc and Caterpillar Inc with an 82% gain this year, the largest rise on the 30- member Dow.