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Boeing Q3 Commercial Deliveries Down Y/Y on Low 737 Demand

Zacks Equity Research

The Boeing Company BA recently announced the program deliveries across its commercial and defense operations for the third quarter of 2019. The figures show a massive 201.6% decline in commercial shipments from the previous year. On a bright note, the company’s defense shipments witnessed a 208% surge year over year.

Q3 Orders & Deliveries

Boeing reported commercial deliveries of only 63 airplanes in third-quarter 2019, significantly declining year over year, primarily due to poor 737 jet deliveries. Delivery of the single-aisle 737 jets fell to five in the quarter from 138 a year ago.

Shipments of the 777 Dreamliner totaled 12, in line with the previous year’s third-quarter delivery. Shipments of the 787 Dreamliner totaled 34 compared with 35 in the year-ago period. For the 747 and 767 jets, the company delivered one and 10 jets, respectively, compared to two and four sold in the year-ago quarter.

In its defense and space business, Boeing’s deliveries totaled 77 in third-quarter 2019, which rose from 25 dispatched in the year-ago period.

Boeing’s total deliveries were 140 units in the third quarter of 2019 compared to 215 in the year-ago quarter.

Analyzing Commercial Deliveries

Being the largest aircraft manufacturer and one of the largest aerospace and defense contractors in the United States, Boeing enjoys a solid inflow of contracts from both the Pentagon as well as foreign allies, courtesy of its varied product offerings.

However, demand for Boeing's 737 jets has been relatively low over the past few quarters, following the consecutive crashes of its two 737 Max 8 jets earlier this year, which led to the subsequent grounding of the product line in March. This has been the primary factor behind such drab delivery figures for the company’s flagship commercial fleet.

Intense Pressure From Airbus SE

Per a recent report by Reuters, Airbus is set to reach a full-year goal in nine months despite factory snags. Per Airbus' recent monthly data, deliveries and new orders are well ahead of Boeing, and the European aircraft giant is on track to outpace the latter in annual deliveries for the first time, since 2011. Such impressive delivery figures of its arch-rival jeopardize Boeing’s position in the commercial aerospace industry.

Price Movement

Boeing’s stock has gained about 1.8% in a year compared with the industry’s growth of 4.4%.




Zacks Rank & Key Picks

Boeing currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the same sector are Lockheed Martin Corporation LMT, Heico Corporation HEI and Teledyne Technologies Incorporated TDY, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Lockheed Martin came up with average positive earnings surprise of 16.03% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has increased 0.52% to $21.22 in the past 60 days.

Heico came up with average positive earnings surprise of 10.07% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has risen 3.1% to $2.31 over the past 60 days.

Teledyne Technologies came up with average positive earnings surprise of 9.26% in the last four quarters. Its long-term growth estimates currently stand at 7.5%.

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