The Boeing Company BA once again reported record deliveries in 2015, retaining its position as the world’s biggest airplane maker. Jet deliveries for this aerospace major touched an all time high in 2015, beating its own projection, borne aloft by strong commercial numbers.
Boeing’s commercial delivery of 762 planes during 2015 accelerated 5.4% year over year thanks to robust 737 and 787 deliveries. It had projected deliveries between 750 and 755 jets for 2015. The year-end figure is likely to beat deliveries of its archrival Airbus, which had delivered 556 jets through Nov 2015. Airbus is scheduled to report its annual orders and deliveries on Jan 12.
Boeing’s total deliveries of 952 jets in 2015 increased approximately 5% while fourth-quarter deliveries of 226 declined 5%.
In the fourth quarter, Boeing delivered 182 commercial airplanes. During the quarter, the Next Generation 737 model proved its popularity yet again, delivering 120 airplanes, followed by its 787 model with 34 deliveries. In the year-earlier period, the company had delivered 126 units of the 737 and 35 units of the 787 model. Boeing delivered 21 units of 777 in fourth-quarter 2015 as against 24 units in the year-ago period.
During 2015, Boeing produced a record breaking 495 single-aisle 737s, up from the 485 it produced in 2014. It delivered its 787 at a rate of nearly 11.25 per month in 2015, up from about 9.5 a month in 2014 and also higher than the company’s goal of 10 monthly deliveries. Notably, Boeing booked more 737 orders than it produced, with 563 orders booked by the end of Dec 2015.
Meanwhile, Boeing’s deliveries in the defense and space business numbered 44 in the fourth quarter of 2015, compared with 43 a year ago. Total deliveries in the quarter consisted of 16 Chinook helicopters (new and renewed) and 10 AH-64 Apache helicopters (both new and remanufactured). The company also delivered 7 F/A-18 jets, 4 P-8 models, 4 F-15s and 2 Commercial and Civil Satellites, and 1 unit of AEW&C.
Boeing booked 768 net orders (accounting for cancellations), valued at $112.4 billion at current list prices. This compares with 1,432 net orders in 2014. Boeing’s net orders will probably not beat Airbus Group out of the top spot for booking new business. Between Jan–Nov 2015, Airbus bagged 1,007 net orders.
Boeing sees rising demand for its commercial airplanes owing to a steady improvement in passenger and freight traffic especially in the emerging markets. According to International Air Transport Association, the global aircraft fleet will expand 3.9% in 2016 to nearly 27,900 aircraft, an increase in global capacity of 7.1% compared with 5.5% growth a year earlier.
We believe that surging global airplane demand is strong enough to accommodate not only Boeing and Airbus but also the Brazilian aerospace conglomerate Embraer SA ERJ.
Boeing is slated to release its fourth quarter 2015 numbers on Jan 27.
Zacks Rank
Boeing currently has a Zacks Rank #3 (Hold). A couple of better-ranked players in the aerospace and defense industry include Huntington Ingalls Industries, Inc. HII and Textron Inc. TXT, both carrying a Zacks Rank #2 (Buy).
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