Boeing Gets More Orders for 777 - Analyst Blog


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The Boeing Company ( BA ) has received a contract worth $1.5 billion at list prices from Pakistan International Airlines for the delivery of five 777-300ER (extended range) airplanes. The terms of the contract also give purchase rights for five additional 777-300ERs to Pakistan International Airlines.

The Boeing 777 is a long-range, wide-body, twin-engine jet airliner. The 777-300ER extends the 777 family's span of capabilities, bringing twin-engine efficiency and reliability to the long-range market. The airplane carries passengers up to 7,930 nautical miles. It is powered by General Electric Company 's ( GE ) engine, GE90-115BLs.

With this sizeable twin-engine jet order, Pakistan International Airlines has completed its wide body fleet replacement program. The aircraft's excellent operating economics, long range capability and reliability will enable it to expand into new long-haul markets.

The Boeing Company believes that fiscal 2011 was the best-selling year for the 777 program with a net order book of 200 aircrafts. We believe that the company is doing well in fiscal 2012 as well. In January this year, the company delivered two 777-300ERs to Saudi Arabian Airlines and also received an order worth $2.4 billion for eight airplanes from it.

The Boeing Company is among the best-positioned in its sector due to its balanced exposure to commercial aircraft and defense equipment. We expect the growth momentum to be maintained by planned production rate increases and a globally diversified customer base.In its earnings call, the company indicated that it plans to increase production rate for Boeing 777 from 7 to 8.3 per month by the first quarter of 2013.

However in the near term, headwinds over the global airline industry along with expected cutbacks in the U.S. defense budget loom large over the current valuation of the company. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

Headquartered in Chicago, Boeing Company is a premier jet aircraft manufacturer and one of the largest defense contractors in the U.S. The company's customers include domestic and foreign airlines, the U.S. Department of Defense (DoD), the Department of Homeland Security, the National Aeronautics and Space Administration (NASA), other aerospace prime contractors, and certain U.S. government and commercial communications customers.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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