Bloomberg | Sep 11, 2019 10:22
(Bloomberg) -- It’s still too early to sound an alarm about the health of the aerospace industry, but one key indicator is blinking yellow.
Slowing jetliner sales at Boeing (NYSE:BA) Co. have sent its book-to-bill ratio, a measure of demand, plunging to levels not seen since the 2009 recession. Investors will be looking for insights into the outlook for commercial aircraft on Wednesday morning, when Boeing Chief Executive Officer Dennis Muilenburg makes his first public comments since the company reported second-quarter earnings in July.
The Chicago-based planemaker netted negative 85 aircraft orders this year through Aug. 31, as airline bankruptcies overseas wiped out sales gains and the worldwide grounding of its 737 Max in March was an added drag. The company delivered 276 aircraft over that stretch for a book-to-bill of -0.31, the first time that ratio has been negative in a decade.
Companies like to keep the measure at around one to replace the backlog they’re shipping to customers.
Boeing’s slump while its best-selling 737 model is sidelined is hardly surprising. Moreover, the ratio matters less for the company right now since it booked $474.3 billion in orders earlier this decade amid the largest sales boom in aerospace history -- a backlog that equates to about seven years of production.
More worrying is that rival Airbus SE has just 95 net orders year-to-date, against 500 deliveries.
“If the results were just Max-related, you’d expect Airbus to be doing better, and they’re not,” said George Ferguson, an analyst with Bloomberg Intelligence. “It’s a sign of the times.”
Boeing (NYSE:BA) rose less than 1% to $370.88 at 9:37 a.m. in New York. Airbus advanced less than 1% to 123.14 euros.
(Updates with shares in last paragraph.)
Written By: Bloomberg
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
More markets insights, more alerts, more ways to customize assets watchlists only on the App
More content, faster quotes and charts, and a smoother experience is available only on the App.