This page is temporarily not available. Please check later as it should be available shortly. If you have any questions, please email customer support at email@example.com or call 800-767-3771 ext. 9339.
The Boeing Company (BA - Analyst Report) announced that All Nippon Airlines or ANA Group has ordered 11 787-9 Dreamliners. The order, valued at $2.7 billion at current list prices, brings the total number of 787s ordered by ANA till date to 66 airplanes consisting of 36 787-8s and 30 787-9s.
The airline has announced plans to launch a new route from Narita to San Jose starting January 2013 using the 787, while current services between Narita and Seattle will switch to 787 operations on October 1, 2012 and Haneda to Beijing to the 787 on October 28, 2012.
The Boeing 787-9 Dreamliner is a slightly larger version of the 787-8 and can carry 250-290 passengers on routes spanning 8,000 to 8,500 nautical miles. The 787 provides airlines with higher fuel efficiency, resulting in high environmental standards. According to Boeing, the airplane uses 20% less fuel than its peers.
Boeing enjoys a unique position as the largest aircraft manufacturer in the world in terms of revenues, orders and deliveries, and is also one of the largest aerospace and defense contractors. Besides, its revenues are spread across more than 90 countries around the globe.
Looking forward, Boeing in its 2012 Current Market Outlook estimates a $4.5 trillion market for 34,000 new commercial airplanes over the next 20 years. Boeing’s projection of growth is based on the strength of the commercial aviation market, recovery witnessed in world economies and strong demand for fleet addition and replacement. Airline traffic is forecast to grow at a 5% annual rate over the next two decades, with cargo traffic projected to grow at an annual rate of 5.2%.
Inspired by such strong projections, Boeing recently raised its full-year 2012 earnings per share guidance to a range of $4.40–$4.60 versus its earlier guidance range of $4.15–$4.35. The company’s revenue guidance for 2012 is in the range of $79.5–$81.5 billion versus the earlier range of $78.0–$80.0 billion. Commercial Airplanes' 2012 deliveries are expected to be between 585 and 600 airplanes, which are already sold out. This includes an expected 70 to 85 787 and 747-8 deliveries. Commercial Airplanes' 2012 revenue is expected to be between $47.5 billion and $49.5 billion with operating margin hovering around 9.0%.
In the defense space, however, the threat of cutbacks will loom over the company going forward. Overall, Boeing expects defense revenue for 2012 to be between $31.5 billion and $32.0 billion with operating margin greater than 9%.
Boeing currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we are maintaining our Neutral recommendation on the stock. This is in sync with other aerospace and defense behemoths, General Dynamics Corporation (GD - Analyst Report) and L-3 Communications Holdings Inc. (LLL - Analyst Report).