Boeing Reports Second-Quarter Commercial & Defense Deliveries

The Boeing Company BA recently announced program deliveries across its commercial and defense operations for the second quarter of 2020. The figures show a massive 77.8% decline in commercial shipments from the previous year. However, the company’s defense shipments increased 18.9% year over year.

Combining both segments, Boeing’s total deliveries in the second quarter of 2020 were a mere 64 units compared with 127 units delivered in the year-ago quarter.

Q2 Commercial Deliveries

Boeing reported commercial deliveries of only 20 airplanes in second-quarter 2020, declining significantly year over year, primarily led by dismal 737 jet deliveries and comparatively lower deliveries of the 787 Dreamliner.

Delivery of the single-aisle 737 jets fell to four in the quarter from 24 a year ago. Shipments of the 777 model totaled four compared with 12 in the previous year’s second quarter. Shipments of the 787 Dreamliner totaled seven compared with 42 delivered in the year-ago period. The company delivered only four 767 jets during the quarter compared with 10 767 jets sold in the year-ago quarter.

Factors Leading to Poor Delivery Figures

Over the past few quarters, demand for Boeing's 737 jets has relatively remained low, following the consecutive crashes of its two 737 Max 8 jets in March 2019. Furthermore, as the impacts from the coronavirus pandemic continue to cripple aircraft demand, Boeing had to again encounter a significant drop in aircraft deliveries.

Due to the COVID-19 crisis, the company's operations were severely halted, including a shutdown of its commercial airplane production for a few weeks, as stated by Greg Smith, Boeing’s executive vice president of Enterprise Operations, chief financial officer and interim leader of Communications. Moreover, as air traffic slowed sharply due to the prolonged pandemic impacts, new aircraft that were supposed to get delivered are now lying idle in Boeing's manufacturing plants.

Boeing vs Airbus

Against the 20 aircraft deliveries made by Boeing, Airbus SE EADSY remained ahead in terms of deliveries made, as the European aircraft giant delivered a total of 74 commercial aircraft in the second quarter of 2020. Evidently, in terms of commercial deliveries, Boeing’s arch-rival remained a step ahead during the second quarter.

A Brief Look at Boeing’s Defense Deliveries

Over the past few years, the United States along with many other nations has strategically strengthened and increased its defense spending due to the rising worldwide geopolitical tensions. Notably, such increased spending has been boosting defense deliveries made by defense giants, such as Boeing, Lockheed Martin LMT and others.

In its defense and space business, Boeing’s deliveries totaled 44 in second-quarter 2020, which improved from 37 dispatched in the year-ago period.

Price Movement

Boeing’s stock has improved 22% in the past three months against the industry’s decline of 2.6%.

Zacks Rank & A Key Pick

Boeing currently carries a Zacks Rank #4 (Sell).

A better-ranked stock in the same sector is Hexcel Corp. HXL, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Hexcel Corp. delivered a four-quarter earnings beat of 1.16%, on average. The company has a long-term earnings growth rate of 5.6%.

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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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