Wednesday, July 24, 2013

Boeing's 2nd Quarter March To The Bank

So much detail and so little time to express where Boeing is today. Since Boeing is disclosing its big economic footprint forward in a swamp of fires, mishaps, and crashes during the second quarter. This will be more about orders sales and accomplishments, which promises to bolster Boeing's world position in the financial markets, as it wills its way through with a manufacturing swagger. Boeing builds an immense portfolio of military items far exceeding its European counterpart Airbus. Space and military is the dark horse many people forget to think about when buying Boeing stock.

The company's commercial-plane division sold 169 planes during the quarter, including 16 Dreamliners. The company had quarterly revenue of $13.6 billion with earnings of nearly $1.5 billion or 10.7%, " 

"Asked about criticism from rival Airbus about the Dreamliner, McNerney said the plane has had no more problems than the popular 777 when it was introduced. "The reliability of this airplane is about the same as the reliability that we've had with new models, including the most successful wide-body we've ever introduced, the 777," McNerney said. "There are a lot of things that happen early." 
Bart Jansen, USA TODAY 1:23 p.m. EDT July 24, 2013"

2nd Quarter Order Numbers
Order DateCustomerModel SeriesOrders
26-Apr-2013Business Jet / VIP Customer(s)777-200LR1
23-Apr-2013Unidentified Customer(s)737-MAX50
April Total51
07-May-2013KLM - Royal Dutch Airlines777-300ER1
06-May-2013Qatar Airways777-300ER2
13-May-2013Southwest Airlines737-8005
13-May-2013Southwest Airlines737-MAX30
08-May-2013Turkish Airlines737-80020
08-May-2013Turkish Airlines737-MAX50
21-May-2013Unidentified Customer(s)737-80040
30-May-2013Unidentified Customer(s)737-MAX5
21-May-2013Unidentified Customer(s)737-MAX61
07-May-2013United Air Lines737-900ER2
May Total232
19-Jun-2013CIT Leasing Corporation737-MAX30
18-Jun-2013Singapore Airlines787-1030
19-Jun-2013Unidentified Customer(s)737-80020
19-Jun-2013Unidentified Customer(s)737-MAX20
03-Jun-2013United Air Lines737-900ER2
18-Jun-2013United Air Lines787-1010
June Total287

First Quarter 2013 Orders 

 Second Quarter 2013 Orders Total
   YTD 2013 Orders Total
2013 Orders Detail
2013 Aircraft Sold Equals Aircraft Delivered

First Quarter 2013 Deliveries Detail
Second Quarter 2013 Deliveries Detail
 2013 Deliveries Detail
Final Score Card: 790 Orders and 306 Sales/deliveries. 790-306= 484 net backlog added! Just In First half of 2013! Order to Sales Ratio is a + 2.58/1. A further slippage ratio of backlog. If Boeing gains parity on the single isle market in the Max vs Neo battle, then Boeing is forced to expand production. However its just not a Max vs Neo battle, Boeing has taken significant orders for its NG stable of aircraft in 2013 (Ryanair) not shrinking the 737NG backlog as much as predicted. In fact if one factors in the NG orders with the Max this year, then the Neo does not have that subtial of a lead since Airbus has taken orders from its preferred customer's during the last three years. Airbus orders for the Neo will slump a bit as the order book turf wars will now began in earnest for who really has the winning aircraft.  A 13% improvement for the Max performance over the NG is a bitter pill to swallow for Airbus since the old NG outperformed the old A320 to start with in the first place. When customers begin to populate airspace with the best airplane and reorders begin on this new line of aircraft a clearer picture will emerge in competitive airline travel markets.

Boeing needs to up productivity in order to take on more orders. Airlines can't order equipment 8 years in advance compensating Boeing for this dilemma. Airbus is rapidly approaching a backlog saturation as is Boeing experiencing. Boeing needs to build more facility infrastructure in the next five years at both Charleston and Puget Sound or expand into Southern California where they have a footprint. The decisions coming in 2014 will tip Boeing's hand on what it will do if they gain another 1,000 units ordered over its deliveries or the sales pace.  Boeing's world outlook on demand is starting to materialize. They are late in the effort to keep up with demand. However since they addressed this concern back in 2011. I would look for plant and facility announcement to occur in 2014 after the 777X is launched. Puget Sound and Charleston will not be able to satisfy customers and the order book, if this trend continues, one more year of having a desperate orders/sales ratio continuously running into the plus, and without correcting the Ratio with adding further production facilities is a great concern. Lead your own research off with Boeing's public record. The devil is in the details. Thank you Randy Tinseth for the information on this link.

We forecast a long-term demand for 35,280 new airplanes, valued at $4.8 trillion. We project that 14,350 of these new airplanes (41 percent of the total new deliveries) will replace older, less efficient airplanes, reducing the cost of air travel and decreasing carbon emissions. The remaining 20,930 airplanes will be for fleet growth, stimulating expansion in emerging markets and innovative airline business models. Approximately 24,670 airplanes (70 percent of new deliveries) will be single-aisle airplanes, reflecting growth in emerging markets such as China, and the continued expansion of low-cost carriers throughout the world. Widebody share will also increase, from 23 percent of today's fleet to 24 percent in 2032. The 8,590 new widebody airplanes will allow airlines to continue expansion into more international markets.

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