Boeing (NYSE:BA) Co. is gearing up for a robust end to the year as it plans to deliver a combined total of 84 aircraft, including 70 narrowbody 737s and 14 widebody 787 Dreamliners in November and December. This ambitious push is aimed at meeting the company's revised annual target of at least 375 narrowbody jets, a reduction from the initial forecast of 400 to 450.
The aerospace giant's efforts come on the heels of a less successful October, where rival Airbus SE (OTC:EADSY) delivered twice as many aircraft. Despite this, Boeing remains optimistic about its delivery capabilities, drawing confidence from its performance in the final months of the previous year when it matched a similar delivery pace.
In October, Boeing faced production challenges, such as defects that led to misdrilled holes on some aircrafts' aft pressure bulkheads. Still, the company managed to deliver various models including 18 737 MAXs, an older-model 737 NG set for conversion into a P-8 maritime surveillance aircraft for the U.S. Navy, three 777 freighters, six 767s, and six Dreamliners.
During that month, Boeing also secured a significant deal with Southwest Airlines (NYSE:LUV) for 111 MAX jets but experienced a setback with a cancellation from Aerolineas Argentinas. Despite these ups and downs, Boeing's gross orders since January climbed to 841 net orders, reaching a tally of 1,066 net orders after accounting adjustments. In comparison, Airbus has accumulated a net total of 1,334 planes after cancellations.
The recent Dubai Air Show marked a turning point for Boeing with an influx of orders, particularly for widebody aircraft. This surge in demand has set a positive tone for November. At the show, Boeing received orders and commitments for 180 jets, largely favoring the more expensive widebody models—a stark contrast to Airbus's modest tally of 40 aircraft orders.
CFO Brian West indicated that production stabilization is anticipated by year-end with an output of 38 jets per month. By October's end, Boeing had delivered a total of 405 commercial jets for the year, including 34 airplanes in October alone—18 of which were MAXs. West has set a target of delivering at least 38 or 39 MAXs monthly to reach the year-end goal.
As both manufacturers vie for market dominance in commercial aviation, Boeing's focus on widebody deliveries is evident with both companies having delivered comparable numbers in that category—15 for Boeing and 11 for Airbus in October.
Boeing CEO Dave Calhoun has underscored the company's commitment to meeting demand and overcoming production challenges. With the end-of-year delivery schedule now set in motion, all eyes will be on Boeing as it strives to match its delivery pace from last year and close out the year on a strong note.
InvestingPro Insights
Boeing, a prominent player in the Aerospace & Defense industry, has shown promising signs with an accelerating revenue growth of 23.34% over the last twelve months as of Q3 2023. This aligns with the company's ambitious push to meet its revised annual target of aircraft deliveries, as highlighted in the article. However, it's worth noting that the company's gross profit margin during the same period was 11.44%, indicating a struggle with profitability.
InvestingPro Tips suggest that Boeing's stock may currently be in overbought territory, and 14 analysts have revised their earnings downwards for the upcoming period. The company's current market cap stands at 125.34B USD, with a high EBITDA valuation multiple, reflecting a potentially inflated stock price.
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