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Boeing Q2 Deliveries Fall: Higher Earnings Expected

Jul. 10, 2017 11:46 AM ETThe Boeing Company (BA)

Summary

  • Boeing Q2 deliveries drop year-over-year.
  • Deliveries increased quarter-over-quarter.
  • Boeing very likely to post higher year-over-year earnings.

On the 7th of July, The Boeing Company (NYSE:BA) shared its second quarter deliveries. In this article, I will have a look at the commercial and defense & space deliveries. The delivery volumes are important to observe, since they can give somewhat of an idea of the in-quarter performance of the company.

http://www.boeing.com/resources/boeingdotcom/defense/ch-47_chinook/images/ch_47_gallery_med_02_960x600.jpg

Image courtesy of The Boeing Company

Commercial Deliveries

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Figure 1: Commercial deliveries The Boeing Company Q2 2017 (Source: AeroAnalysis)

What can be seen in Figure 1 is that commercial deliveries have declined for the second year in a row, which is not a strong sign at all if the company is to achieve year-over-year growth figures. Year over year, the number of deliveries in the second quarter fell by 16 units after increasing by 2 units a year earlier. In Figure 2, the deliveries are split out per type which makes it better visible where the lower deliveries come from.

A picture containing plane, sitting, parked, topDescription generated with high confidence

Figure 2: Commercial deliveries The Boeing Company Q1 2017 per aircraft type (Source: AeroAnalysis)

What can be seen is that the decline in deliveries comes from lower Boeing 737 deliveries, but unlike last quarter these lower deliver figures are not compensated for or partly offset by wide body deliveries. It is important to note whether the lower deliveries are structural or not. In the case of the Boeing 737 the lower delivery volume is not structural but can be attributed to Boeing feathering the Boeing 737 MAX into the production line and some delays for the first Boeing 737 MAX deliveries due to technical issues. All with all, these delays are in no way a big deal and I expect Boeing to compensate for the lower deliveries in the first half of the year in the upcoming quarters as it increases production on the Boeing 737 program.

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This article was written by

Dhierin Bechai profile picture
15.15K Followers

Dhierin-Perkash Bechai is an aerospace, defense and airline analyst.

Dhierin runs the investing group The Aerospace Forum, whose goal is to discover investment opportunities in the aerospace, defense and airline industry. With a background in aerospace engineering, he provides analysis of a complex industry with significant growth prospects, and offers context to developments as they occur, describing how they might affect investment theses. His investing ideas are driven by data informed analysis. The investing group also provides direct access to data analytics monitors. Learn more.

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