10-year

10-Year Anniversary Promotion (20% off)

Join GuruFocus Premium Membership Now for Only $279/Year

Once a decade discount

Save up to $500 on Global Membership.

Don't Miss It !

Free 7-day Trial
All Articles and Columns »

Put your money on BA

February 23, 2014 | About:
Nitish

Nitish

1 followers

Boeing (BA), the aerospace giant, has been doing great in its commercial aircraft segment. The company has a history of producing an array of fuel efficient aircrafts such as 737, 787 and not to forget the legendary 777. The commercial-aircraft segment of the company annually contributes about 63% to the total revenue of the company. In fact in the last quarter, the company reported an increase of 7.8% in the commercial aircraft segment. This meant an equal increase in the company’s revenues. This was driven by increased orders of Boeing’s 787 Dreamliner and 777 aircrafts. The 737 family of aircrafts are also not far behind as they contributed to as much as 79% of Boeing’s total orders in 2013.

When we talk about the super aircrafts produced by Boeing we cannot forget 737- MAX aircraft that is powered by an advanced LEAP-1B double capacity engine. With superior fuel efficiency of 737, Boeing has been getting brilliant orders for this aircraft. By upgrading their fleets with 737 family aircraft, airliners will reduce fuel consumption by 14% compared to current-generation aircraft model.

Huge Orders in line and more to come:

The aerospace company has just received an order of a cool 40 737 aircrafts from General Electric. The order consists of twenty 737-MAX 8 and 20 Next-Generation 737-800 worth over $3.9 billion. This apart, the company also has orders from the likes of SpiceJet which has ordered a new set of 40 737-MAX aircrafts that are worth approximately $4million. Another Flydubai also placed an order of 75 Boeing 737-MAX 8 and 11 Next-Generation 737-800 worth $8.8 billion last month.

Boeing had a steep rise in its order book for 737 models from 178 aircraft in 2009 to 1,208 aircraft in 2013. The last quarter of 2013 saw Boeing receive unbelievably large orders of 366 aircraft for 737 models and delivered 110 aircraft. This helped the company grow its backlog to $441 million.

Speeding Production:

To enhance the production of the 787 Dreamliner, the company is planning to expand its South Carolina facility. By enhancing the production of the company’s trump card, that is, 737 aircrafts, the company can expect to earn additional revenue of around $4.8 billion.

Final Takeaway:

The growing demand for Boeing airplanes is expected to make the company’s top line even stronger by the year end. For the record, the 737 aircrafts has helped the company achieve astounding revenue of $86 billion. An increased production rate is only going to stabilize the revenue base for the aero-giant. Investment thus, could be a decent idea.


Rating: 3.7/5 (6 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK