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International commercial aircraft manufacturer, The Boeing Company (BA - Analyst Report) said its commercial delivery during the third quarter accelerated 14.1% from the year-ago period as the pace of deliveries for its 787 Dreamliner nearly doubled despite a series of technical issues.

During the third quarter, the 737 model continued to be the pillar of Boeing’s strength in the commercial airplane sector with deliveries of 112 airplanes, followed by its 777 model with 26 deliveries. Both these models continue to perform better than competing models owing to their fuel efficiency and lower operating costs. In the year-earlier period, the company delivered 102 units of the 737 and 20 units of the 777 model. Its 787 deliveries advanced 91.6% on an annualized basis delivering 23 units in the latest quarter.

Boeing has delivered 476 jets through the first nine months of 2013 compared with 436 delivered in the comparable period last year. The aerospace behemoth expects to deliver 635 to 645 aircraft this year in order to meet the demand for more aircraft in Asia, Latin America and the Middle East, while replacing older fleet in the U.S. and Europe.

Boeing’s much-hyped 787 Dreamliner was marred by glitches from the very beginning. Its delayed launch in 2011 was followed by two battery overheating incidents in Jan 2013 that grounded the entire fleet of 50 Boeing 787 airplanes. Although, in Apr 2013, Boeing received the green light from the U.S. Federal Aviation Administration for the 787 Dreamliner’s redesigned battery, its next-generation 787 Dreamliner encountered a series of hiccups thereafter.

In spite of the glitches, Boeing has successfully delivered its 787 Dreamliner so far. However, Boeing warned that the partial U.S. government shutdown will likely delay shipments of Dreamliners from its South Carolina factory. Planes need final Federal Aviation Administration sanction before they are delivered to customers.

Meanwhile, Boeing’s deliveries in the defense and space business numbered 43 in the third quarter of 2013 compared with 50 in the third quarter of 2012 and 31 in the second quarter 2013. Of this, 15 were Chinook helicopters, 12 were F/A-18E/F and EA-18G fighter jets and 11 were Apache helicopters. It also delivered 2 units of C-17 and P-8 each and 1 Satellites.

Headwinds in the global airline industry and cutbacks in the U.S. defense budget have certainly shaken the confidence of many investors. Budget deficits and political uncertainty make future defense budgets vulnerable to cutbacks. The threat of sequestration has created significant planning difficulties for the customers and the entire aerospace industry, thereby leading to a decline in orders.

Although Boeing’s share price was down 2.2% to $115.24 on amid a broad market downturn, its share price has proven to be shock resistant, surging almost 52% year to date.

Boeing presently retains a short-term Zacks Rank #3 (Hold). There are other companies in the sector that appear promising and worth accumulating now. These are Zacks Ranked #2 (Buy) stocks Erickson Air-Crane Inc. (EAC - Snapshot Report), Northrop Grumman Corp. (NOC - Analyst Report) and Lockheed Martin Corp. (LMT - Analyst Report).

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