U.S. Markets closed

Boeing's 2019 Commercial Deliveries Slump, Airbus Overtakes

Zacks Equity Research

The Boeing Company BA recently announced program deliveries for its commercial products for the fourth quarter and 2019. The fourth quarter and full-year figures show a 66.8% and 52.9% slump, respectively, in commercial shipments.

On the contrary, Airbus SE EADSY delivered a record 863 commercial aircraft to 99 customers in 2019, 8% up from 2018 deliveries.

Boeing’s Q419 Deliveries: Where Things Faltered

Boeing reported fourth-quarter 2019 commercial deliveries of a mere 79 aircraft compared to 238 airplanes delivered during the fourth quarter of 2018. The dismal figure resulted from lower 737 jet deliveries, which stood at nine compared to 173 delivered in the year-ago quarter.

However, shipments of the 777 and 787 Dreamliners totaled 12 and 45 in the quarter compared with 11 and 39, respectively, in the year-ago period. The company delivered two 747 jets and 11 767 jets compared to one 747 and 14 767 jets sold in the year-ago quarter. Although these jets reflected an improved delivery figure, it was nowhere enough to offset Boeing’s lagged deliveries for the 737 product line.

Airbus Topples Boeing on 2019 Deliveries

Boeing dealt with a disappointing 2019 after its once best-selling 737 Max planes had to be grounded in March following two fatal crashes that killed 346 people. As a result, post March, the aircraft giant witnessed massive order cancellations and lower production volumes, ultimately leading to dismal delivery figures. Eventually, in December, the company had to temporarily suspend the production of 737 Max jets.

Due to such setbacks, Boeing’s arch-rival, Airbus, benefited a great deal in acquiring large contracts throughout the year, as customers started to shift to Airbus from Boeing. This is evident from the fact that Airbus had a backlog of a massive 7,482 aircraft toward the end of 2019.

In 2019, Boeing delivered only 127 models of the 737 airplanes, whereas Airbus delivered 642 jets from its A320 family, the closest match to the 737 jets. On the flip side, in the year-ago period, Boeing delivered a whopping 580 units of the 737 model.

Notably, Boeing could only manage to deliver 380 aircraft in 2019 compared to Airbus, which successfully delivered a record 863 commercial aircraft, 127% more than Boeing and exceeding its 2019 delivery target of 860 planes.

Price Performance

The poor performance of the company’s commercial aircraft segment has also negatively impacted its shares price, which has declined 7.3% in the past six months against the industry’s growth of 2.7%.



Zacks Rank & Stocks to Consider

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

A few better-ranked stocks in the same space are L3Harris Technology Inc. LHX and Lockheed Martin Corporation LMT, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

L3Harris’ long-term growth estimate currently stands at 8%. The company delivered a positive earnings surprise of 5.02%, on average, in the last four quarters.

Lockheed Martin delivered a four-quarter earnings beat of 14.41%, on average. It currently has a solid long-term earnings growth rate of 7.1%.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q3 2019, while the S&P 500 gained +39.6%, five of our strategies returned +51.8%, +57.5%, +96.9%, +119.0%, and even +158.9%.

This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.

See their latest picks free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
 
Airbus Group (EADSY) : Free Stock Analysis Report
 
The Boeing Company (BA) : Free Stock Analysis Report
 
L3Harris Technologies Inc (LHX) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.