The aerospace giant The Boeing Company BA reported strong first-quarter 2015 deliveries, with commercial deliveries jumping more than 14% year over year. Boeing’s share price closed at $149.28 on Apr 3, reflecting a gain of 17.2% in the past one year. In comparison, the Dow Jones Industrial Average has gained 8.2% in the corresponding period.
Boeing delivered 184 airplanes in the quarter, up approximately 14.3% 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 121 airplanes, followed by its 787 Dreamliner model with 30 deliveries, pumping out at 10 a month. The company expects a total of 135 Dreamliner shipments for 2015. In the year-earlier quarter, the company had delivered 115 units of the 737 and 18 units of the 787 model.
Boeing also delivered 24 777s during the first quarter 2015, flat with the year-ago period.
Meanwhile, Boeing’s deliveries in the defense and space business numbered 42 in the first quarter 2015 compared with 46 in the comparable period last year. In the quarter under review, numbering among the total deliveries were 16 AH-64 Apache helicopters (both new and remanufactured) and 11 F/A-18 jets. The company also delivered 10 Chinook helicopters (new and renewed), 1 C-17 Globemaster III, 1 C-40A, 1 F-15, and 2 P-18 models.
The gradual recovery in the global economy is bringing in a steady improvement in passenger and freight traffic. Boeing with its fuel efficient single-aisle aircraft is well poised to exploit this demand surge. This is amply reflected in its record backlog of $502 billion at the end of 2014.
Despite setbacks and technical snags, its 787 Dreamliner and 737 remain popular with major airlines. In particular, the fourth generation of the 737 family – the 737 Max – is a premier aircraft from Boeing’s stable and sees brisk demand in the single-aisle market for its fuel efficiency and low carbon dioxide emissions.
Commercial Airplanes' 2015 deliveries are expected to be between 750 and 755.
Boeing forecasts a more than 100% rise in demand for commercial aircraft by 2033 from 2013 levels. Boeing projects that 42% of this rise will be replacement of an older fleet while the balance will be for new airplanes. The company is expected to benefit greatly from improving air traffic which is projected to grow 5% annually over the next two decades.
Boeing currently has a Zacks Rank #3 (Hold). Well-placed players in the aerospace and defense industry include Huntington Ingalls Industries, Inc. HII, Air Industries Group AIRI and Rockwell Collins Inc. COL. Huntington Ingalls carries a Zacks Rank #1 (Strong Buy) while Air Industries Group and Rockwell Collins hold a Zacks Rank #2 (Buy).
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