The Boeing Company (BA) announced deliveries across its commercial and defense operations for the fourth quarter and 2011. In the commercial space the airliner delivered 128 and 477 airplanes during the fourth quarter and 2011, respectively. However the numbers missed the target of 480 for fiscal 2011.
The 737 model continues to be a major pillar of Boeing’s strength in the commercial airplane sector with deliveries of 91 airplanes, followed by its 777 model with 20 deliveries in the fourth quarter. In fiscal 2011 the numbers were 372 and 73, respectively. Both these models continue to do well due to their fuel efficiency and lower operating costs compared with competing models. The company during the quarter also delivered nine 747s, six 767s, and two 787. During fiscal 2011 the numbers stand out at 20 767s, 9 747s, and 3 787s, respectively.
Boeing’s deliveries in the defense and space business were at 32 in the fourth quarter of 2011. Of this 11 came from F-18 and EA-18G fighter jets, and 10 from Chinook helicopters. During fiscal 2011, the company delivered 119 units, of this 49 comprised F-18 and EA-18G fighter jets, and 32 were Chinook helicopters.
Boeing enjoys a coveted position as the largest aircraft manufacturer in the world in terms of revenues, orders and deliveries. Besides, it is one of the leading global aerospace and defense contractors. Also, its revenues are spread across more than 90 countries.
Strong performance of the commercial airplanes business and stable core operations allowed Boeing to register a solid third quarter 2011. The company’s earnings surpassed both the year-ago figure and the Zacks Consensus Estimate.
Boeing expects its fiscal 2011 revenue to be in the range of $68 billion to $70 billion and earnings per share guidance for fiscal 2011 to be in the range of $4.30 – $4.40.
In hindsight, the U.S. GDP growth, in 2011, improved steadily with a 2.0% rise in the third quarter, up from 1.3% in the second and 0.4% in the first. In keeping with the momentum, we expect the final quarter to clock GDP growth of 3%. However, for the inaugurating quarter of 2012, our optimism is tempered by weak US fundamentals that are on a tight leash because of the Euro-crisis and its effects on the global financial markets. There is also the uncertainty of an extension of payroll tax cuts. Such trepidations will certainly add to the phobia in the public psyche, keeping the risks of further cutbacks in future defense budgets at a high.
Considering the fundamentals, we are maintaining our Neutral recommendation on the stock. Boeing currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. This is in sync with other aerospace and defense behemoths like General Dynamics Corporation (GD) and Lockheed Martin Corporation (LMT).
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