Boeing Q2 Commercial Delivery Up 9%; 1H Ahead of Airbus - Analyst Blog
The aerospace giant The Boeing Company BA reported strong second-quarter as well as first-half 2015 delivery numbers. Boeing delivered 381 commercial jetliners in the first half of the year, increasing 11.4% year over year and beating its archrival Airbus. The European aerospace major delivered 304 commercial planes so far this year.
Boeing’s total deliveries in the second quarter 2015 jumped approximately 11% year over year. Its share price closed at $140.52 on Jul 6, reflecting a gain of 8.11% year to date. In comparison, the Dow Jones Industrial Average has declined 0.78% in the corresponding period.
The year has been good for Boeing so far as compared to the previous year, when the stock faltered on the bourses. The company’s new 737 Max model has drawn much interest while the 787 Dreamliner continues to do well.
In the second quarter, Boeing delivered 197 commercial airplanes, up approximately 8.8% year over year. The Next Generation 737 model continued to be the pillar of Boeing’s strength in the commercial airplane sector with deliveries of 128 airplanes, followed by its 787 Dreamliner model with 34 deliveries, pumping out at 11 a month. The company expects a total of 135 Dreamliner shipments for 2015. In the year-earlier quarter, the company had delivered 124 units of the 737 and 30 units of the 787 model.
Boeing also delivered 26 777s during the second quarter, up 8.3% from the year-ago period.
Meanwhile, Boeing’s deliveries in the defense and space business numbered 56 in the second quarter 2015 compared with 47 in the comparable period last year. Total deliveries in the quarter consisted of 19 AH-64 Apache helicopters (both new and remanufactured) and 16 Chinook helicopters (new and renewed). The company also delivered 9 F/A-18 jets, 4 P-18 models, 4 F-15s, 2 C-17 Globemaster III and one each unit of Commercial and Civil satellites as well as Military satellites.
Demand for Boeing’s commercial airplanes is on the rise owing to the steady improvement in passenger and freight traffic especially in the emerging markets. In its recently released outlook, Boeing anticipates the commercial fleet to double over the next two decades to 43,560 airplanes, fueled by sustained 4.9% annual growth in commercial passenger traffic. About 40% of the total commercial demand is likely to come from the Asian markets, another 40% from Europe and North America, and the balance from the rest of the world.
In the race for new orders, Airbus is ahead of Boeing with 348 net new orders so far this year, compared with 281 for Boeing. For 2015, Airbus expects to deliver a “slightly higher” number of commercial jets than the 626 it delivered in 2014. Boeing’s commercial airplane deliveries are expected to be between 750 and 755. Both these aerospace majors have wooed potential customers at the Paris Air Show last month and this has been reflected in their order books.
Boeing, which is slated to release its second quarter 2015 numbers on Jul 22, is likely to suffer a huge competitive disadvantage because of the loss of Export-Import Bank financing, as per the head of the company's commercial aircraft division (read: Will Export-Import Bank Closure Hurt Boeing?).
Zacks Rank
Boeing currently has a Zacks Rank #2 (Buy). Some of the other favorably ranked players in the aerospace and defense industry include General Dynamics Corp. GD, Lockheed Martin Corp. LMT and Northrop Grumman Corp. NOC, all with a Zacks Rank #2 (Buy).
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