International commercial aircraft manufacturer,
The Boeing Company
) said its commercial delivery during the third quarter
accelerated 14.1% from the year-ago period as the pace of
deliveries for its 787 Dreamliner nearly doubled despite a series
of technical issues.
During the third quarter, the 737 model continued to be the
pillar of Boeing's strength in the commercial airplane sector
with deliveries of 112 airplanes, followed by its 777 model with
26 deliveries. Both these models continue to perform better than
competing models owing to their fuel efficiency and lower
operating costs. In the year-earlier period, the company
delivered 102 units of the 737 and 20 units of the 777 model. Its
787 deliveries advanced 91.6% on an annualized basis delivering
23 units in the latest quarter.
Boeing has delivered 476 jets through the first nine months of
2013 compared with 436 delivered in the comparable period last
year. The aerospace behemoth expects to deliver 635 to 645
aircraft this year in order to meet the demand for more aircraft
in Asia, Latin America and the Middle East, while replacing older
fleet in the U.S. and Europe.
Boeing's much-hyped 787 Dreamliner was marred by glitches from
the very beginning. Its delayed launch in 2011 was followed by
two battery overheating incidents in Jan 2013 that grounded the
entire fleet of 50 Boeing 787 airplanes. Although, in Apr 2013,
Boeing received the green light from the U.S. Federal Aviation
Administration for the 787 Dreamliner's redesigned battery, its
next-generation 787 Dreamliner encountered a series of hiccups
In spite of the glitches, Boeing has successfully delivered its
787 Dreamliner so far. However, Boeing warned that the partial
U.S. government shutdown will likely delay shipments of
Dreamliners from its South Carolina factory. Planes need final
Federal Aviation Administration sanction before they are
delivered to customers.
Meanwhile, Boeing's deliveries in the defense and space business
numbered 43 in the third quarter of 2013 compared with 50 in the
third quarter of 2012 and 31 in the second quarter 2013. Of this,
15 were Chinook helicopters, 12 were F/A-18E/F and EA-18G fighter
jets and 11 were Apache helicopters. It also delivered 2 units of
C-17 and P-8 each and 1 Satellites.
Headwinds in the global airline industry and cutbacks in the U.S.
defense budget have certainly shaken the confidence of many
investors. Budget deficits and political uncertainty make future
defense budgets vulnerable to cutbacks. The threat of
sequestration has created significant planning difficulties for
the customers and the entire aerospace industry, thereby leading
to a decline in orders.
Although Boeing's share price was down 2.2% to $115.24 on amid a
broad market downturn, its share price has proven to be shock
resistant, surging almost 52% year to date.
Boeing presently retains a short-term Zacks Rank #3 (Hold). There
are other companies in the sector that appear promising and worth
accumulating now. These are Zacks Ranked #2 (Buy) stocks
Erickson Air-Crane Inc.
Northrop Grumman Corp.
Lockheed Martin Corp.
BOEING CO (BA): Free Stock Analysis Report
ERICKSON AIR-CR (EAC): Free Stock Analysis
LOCKHEED MARTIN (LMT): Free Stock Analysis
NORTHROP GRUMMN (NOC): Free Stock Analysis
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