The Boeing Co. (BA) has decided yet again to slow down the production of its wide-bodied jet airliner – Boeing 747-8 – amid a weak cargo market. The world’s leading plane maker will reduce the monthly production of its 747-8 jetliner to 1.3 aircraft a month from 1.5.
The production slowdown will lower 747 annual deliveries to approximately 16 from 18 starting Sep 2015. Boeing cited lower-than-expected recovery in the cargo market as the reason behind the cut. This will enable Boeing to better execute its Commercial Airplanes business.
Boeing had cut its 747 production last year to 1.5 planes annually. Since the first delivery in 1970, Boeing has delivered 1,498 units of its iconic 747 airplane.
The 747-8 variant, since its launch in 2005, has managed to book only 119 orders, including 68 for the cargo version and the balance for passenger jets. It has delivered 80 747-8 to date and still has a backlog of 39 aircraft through November, comprising 26 orders for the passenger version and 13 for freighter aircraft. This year Boeing has delivered 16 747s through November, a rate of about 1.5 per month. The company still has faith in the longer-term strength of the freighter market.
The wide-body jet airliner – Boeing 747-8 – is the fourth-generation Boeing 747 version, with lengthened fuselage, redesigned wings and improved efficiency. The jet airliner has two main variants – the 747-8 Intercontinental (747-8I) for passengers and the 747-8 Freighter (747-8F) for cargo.
Zacks Rank
Boeing carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same sector include Engility Holdings, Inc. (EGL), General Dynamics Corp. (GD) and Spirit AeroSystems Holdings, Inc. (SPR). While Spirit AeroSystems sports a Zacks Rank #1 (Strong Buy), Engility and General Dynamics hold a Zacks Rank #2 (Buy).
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