Boeing (BA) Stock Up on New Orders
Shares of The Boeing Company (BA) closed up +1.05 or +1.02 percent to $104.08 on Tuesday after the company launched their 787-10 version of their Dreamliner aircraft at the Paris Airshow. Boeing secured 102 firm orders of its new Dreamliner aircraft worth approximately $30 billion at current list prices. Early Wednesday, the company announced that it had also entered into a deal with U.S. airplane leasing company, CIT Aerospace to deliver 30 of its medium haul 737 MAX aircraft.
The deal is worth $3 billion at current catalogue prices. Daily Chart
Chicago, Illinois based Boeing Co. is among the largest aircraft manufacturers in the world and the second largest aerospace and defense contractor. Boeing stock is a component of the Dow Jones Industrial Average and is the United States largest exporter by dollar value. Boeing launched its 787-10 version of the Dreamliner securing orders from five airlines and leasing companies. The company's first version of the 787 Dreamliner, the 787-8 ran into problems earlier this year due to a malfunction in the plane's lithium-ion batteries, which grounded the entire fleet of Dreamliner aircraft for months. The current version, the 787-10 is the third of its type and has a range of 7,000 nautical miles. According to Boeing CEO for Commercial Airplanes, Ray Conner, the new version is 25 percent more efficient than comparable planes in that price range. Orders for the 787-10 came from British Airways, ordering 12 planes, Air Lease (AL
), with 30 planes, GE Capital Services, 10 planes, Singapore Airlines, with 30 planes and United Airlines with 20 aircraft. The orders came right after news that rival manufacturer Airbus had secured an $11.5 billion order form UK discount airline EasyJet. The order was for 135 A320neos, including 35 current generation airplanes and 100 of its next generation aircraft, with an option for purchasing an additional 100 aircraft. In addition to the orders secured at the Paris Airshow, Boeing also struck a deal with CIT Aerospace, which ordered 30 of its new 737 MAX aircraft for a total of $3 billion at current catalogue prices. The new version of the Dreamliner, which has yet to be put into service, will be more fuel efficient and save operating costs for the airline. After the deals announced at the Paris Airshow, Boeing CEO and Chairman Jim McNerney expressed his intention to stay with the company past the retirement age of 65, which has been the company's policy. In addition, he stated that Boeing was "formally committed to building a stretched version of its flagship 787 Dreamliner jet after receiving firm orders for 102 of the planes from five airlines and aircraft leasing companies." Even with the grounding of its 787 fleet earlier this year, Boeing has managed to report revenue for the fourth quarter of 2012 of $22.3 million, a 14 percent increase over 2011's fourth quarter results. Boeing stock has also increased significantly despite the 787 grounding, having traded under $70 as recently as last October. With an EPS of 5.33 and a Price/Earnings ratio of 19.5, Boeing stock continues to show a solid performance so far this year. With the latest plane sales, Boeing stock could continue to trade higher in the near future. Other News About BA Embraer and Boeing Team to Market and Sell KC-390 Medium-Airlift Aircraft
Embraer ERJ and Boeing will partner to sell Embraer's KC-390. Boeing's McNerney Wants to Remain CEO Past 65
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Published on Jun 19, 2013
By Jay Hawk