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iShares U.S. Aerospace & Defense ETF (ITA) - free report >>
Invesco Aerospace & Defense ETF (PPA) - free report >>
First Trust Indxx Aerospace & Defense ETF (MISL) - free report >>
Gabelli Commercial Aerospace and Defense ETF (GCAD) - free report >>
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Tough Time for Boeing in Near Term? ETFs in Focus
Recently, Boeing alerted the public to a new flaw in its 787 Dreamliner planes, which is expected to postpone the delivery of these large-bodied aircraft. This announcement is another bump in the road for the aircraft manufacturer that has been plagued by multiple production issues recently.
The latest hiccup involves an abnormal condition associated with a fitting on the horizontal stabilizer of the 787s. Despite this, the problem is not related to flight safety, and existing aircraft can continue to operate. However, this issue is expected to delay the near-term deliveries by roughly two weeks.
Previously this year, Boeing was forced to suspend deliveries of the same aircraft due to a defect in a fuselage component of specific 787s. Moreover, the company had to make adjustments to some of its top-selling 737 Max planes because of an issue with fittings in some planes' aft fuselages, produced by Spirit Aerosystems.
Nevertheless, Boeing maintains that this new setback will not alter its yearly delivery forecast for the Dreamliner aircraft. The company remains hopeful about delivering between 70 and 80 of these planes this year. Boeing's shares lost 0.7% on Jun 6. The stock also lost 0.3% after hours.
Repercussions for ETFs
This is a crucial time for investors who indirectly hold Boeing stock through ETFs to remain vigilant. As numerous ETFs hold a significant portion of Boeing shares, any prolonged issues with the company could reverberate through these funds.
iShares U.S. Aerospace & Defense ETF (ITA - Free Report) – 17.82% Exposure to Boeing
First Trust Indxx Aerospace & Defense ETF (MISL - Free Report) – 8.60% Exposure
Invesco Aerospace & Defense ETF (PPA - Free Report) – 6.83% Exposure
Gabelli Commercial Aerospace and Defense ETF (GCAD - Free Report) – 5.26% Exposure
Looking Ahead
Despite the recurring production issues, Boeing's outlook is still fairly optimistic. The company's ambitious delivery estimates for the rest of the year indicate this confidence. Furthermore, the current travel boom driving the demand for new aircraft also adds to Boeing's favorable prospects.