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Boeing Reports Q2 Deliveries: Commercial Up, Defense Drags
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The aerospace behemoth The Boeing Company (BA - Free Report) reported second-quarter 2016 deliveries wherein commercial deliveries were up 1% whereas defense shipments were down 19.6% year over year.
Boeing’s second-quarter 2016 commercial deliveries of 199 airplanes were driven by higher demand for its 777 and 787 Dreamliners. Sequentially, deliveries showed a 13.1% improvement. However, deliveries of its single-aisle 737 slipped to 127 in the second quarter from 128 a year ago as it was busy with a newer version of its most popular plane, the 737 MAX.
Shipments for 777 and 787 Dreamliners were 28 and 38 compared with 26 and 34 in the year-ago period, respectively. For the 747 and 767 jets, the company’s deliveries were a respective 2 and 4 in the quarter, compared with 5 units of 747s and 4 units of 767s in the year-ago quarter.
In the defense and space business, Boeing’s deliveries numbered 45 in the second quarter of 2016, compared with 56 a year ago and 50 in the preceding quarter. Total deliveries in the quarter consisted of 15 AH-64 Apache helicopters (both new and remanufactured) and 14 Chinook helicopters (new and renewed). The company also delivered 6 F/A-18 jets, 5 P-8 models, 3 F-15s, 1 C-17 Globemaster III and 1 Commercial and Civil Satellite.
Boeing’s total deliveries were 244 units in the second quarter 2016 compared with 253 a year ago.
1H16 Numbers
In the first half of the year, Boeing’s total shipments were 470 units compared with 479 in the corresponding year-ago period. Of the total, commercial deliveries were 375 (down from 381 in 1H15) and defense deliveries were 95 units (down from 98 in 1H15).
Is Boeing Losing Contracts?
The first-half results clearly show that Boeing is lagging in delivery numbers on a year-over-year basis.
During the release of first-quarter 2016 delivery numbers, Boeing’s chief executive had highlighted the fact that the company is losing important contracts for aircraft and satellites to overseas rivals due to a stand-off in Congress over the future of the U.S Export-Import (Ex-Im) Bank. This has restricted the export credit agency’s financing capabilities.
Boeing had in the past significantly benefited from the support it received from the Ex-Im Bank. After boosting U.S. exports for nearly eight decades, the credit agency’s charter finally ended in Jun 2015. The closure of the Ex-Im Bank is undoubtedly a setback for Boeing as a substantial portion of its foreign orders was guaranteed by the bank.
Presently, three out of the five seats on the Ex-Im Bank’s board are vacant. This means transactions of more than $10 million or deals lasting for over one year cannot be approved. The board’s short of a quorum has left the bank closed to aircraft deals since last July. A reauthorization last December following a long bipartisan political war has not helped matters.
Q2 Order Details
If we look at the second quarter order details of Boeing, the company received 171 commercial orders comprising 147 units of 737, 6 units of 767, 2 units of 777 and 16 units of 787 Dreamliners. In the year-ago period, Boeing received 201 total orders.
For 2016, Boeing had earlier guided slightly lower deliveries due to a lower production rate on the 747 program and the transition toward the 737 MAX.
Yet, this defense and aerospace major is picking up major contracts and maintaining a strong order inflow.
Still we need to keep a close eye on whether orders are climbing from the third quarter. A lot is expected from the Farnborough Airshow this July. Success at the event will help Boeing to meet its anticipated book-to-bill ratio.
The company is slated to release second quarter 2016 results on Jul 27.
Zacks Rank
Boeing currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the aerospace and defense equipment industry include Engility Holdings, Inc. , Lockheed Martin Corp. (LMT - Free Report) and Northrop Grumman Corp. (NOC - Free Report) , all with a Zacks Rank #2 (Buy).
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Boeing Reports Q2 Deliveries: Commercial Up, Defense Drags
The aerospace behemoth The Boeing Company (BA - Free Report) reported second-quarter 2016 deliveries wherein commercial deliveries were up 1% whereas defense shipments were down 19.6% year over year.
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Q2 Shipments
Boeing’s second-quarter 2016 commercial deliveries of 199 airplanes were driven by higher demand for its 777 and 787 Dreamliners. Sequentially, deliveries showed a 13.1% improvement. However, deliveries of its single-aisle 737 slipped to 127 in the second quarter from 128 a year ago as it was busy with a newer version of its most popular plane, the 737 MAX.
Shipments for 777 and 787 Dreamliners were 28 and 38 compared with 26 and 34 in the year-ago period, respectively. For the 747 and 767 jets, the company’s deliveries were a respective 2 and 4 in the quarter, compared with 5 units of 747s and 4 units of 767s in the year-ago quarter.
In the defense and space business, Boeing’s deliveries numbered 45 in the second quarter of 2016, compared with 56 a year ago and 50 in the preceding quarter. Total deliveries in the quarter consisted of 15 AH-64 Apache helicopters (both new and remanufactured) and 14 Chinook helicopters (new and renewed). The company also delivered 6 F/A-18 jets, 5 P-8 models, 3 F-15s, 1 C-17 Globemaster III and 1 Commercial and Civil Satellite.
Boeing’s total deliveries were 244 units in the second quarter 2016 compared with 253 a year ago.
1H16 Numbers
In the first half of the year, Boeing’s total shipments were 470 units compared with 479 in the corresponding year-ago period. Of the total, commercial deliveries were 375 (down from 381 in 1H15) and defense deliveries were 95 units (down from 98 in 1H15).
Is Boeing Losing Contracts?
The first-half results clearly show that Boeing is lagging in delivery numbers on a year-over-year basis.
During the release of first-quarter 2016 delivery numbers, Boeing’s chief executive had highlighted the fact that the company is losing important contracts for aircraft and satellites to overseas rivals due to a stand-off in Congress over the future of the U.S Export-Import (Ex-Im) Bank. This has restricted the export credit agency’s financing capabilities.
Boeing had in the past significantly benefited from the support it received from the Ex-Im Bank. After boosting U.S. exports for nearly eight decades, the credit agency’s charter finally ended in Jun 2015. The closure of the Ex-Im Bank is undoubtedly a setback for Boeing as a substantial portion of its foreign orders was guaranteed by the bank.
Presently, three out of the five seats on the Ex-Im Bank’s board are vacant. This means transactions of more than $10 million or deals lasting for over one year cannot be approved. The board’s short of a quorum has left the bank closed to aircraft deals since last July. A reauthorization last December following a long bipartisan political war has not helped matters.
Q2 Order Details
If we look at the second quarter order details of Boeing, the company received 171 commercial orders comprising 147 units of 737, 6 units of 767, 2 units of 777 and 16 units of 787 Dreamliners. In the year-ago period, Boeing received 201 total orders.
For 2016, Boeing had earlier guided slightly lower deliveries due to a lower production rate on the 747 program and the transition toward the 737 MAX.
Yet, this defense and aerospace major is picking up major contracts and maintaining a strong order inflow.
Still we need to keep a close eye on whether orders are climbing from the third quarter. A lot is expected from the Farnborough Airshow this July. Success at the event will help Boeing to meet its anticipated book-to-bill ratio.
The company is slated to release second quarter 2016 results on Jul 27.
Zacks Rank
Boeing currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the aerospace and defense equipment industry include Engility Holdings, Inc. , Lockheed Martin Corp. (LMT - Free Report) and Northrop Grumman Corp. (NOC - Free Report) , all with a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>