Bloomberg News

Boeing Half-Year Shipments on Target

July 05, 2012

Boeing Half-Year Shipments on Target

A Boeing Co. 787 Dreamliner sits on display during its global Dream Tour at Reagan National Airport in Washington, D.C. Photographer: Andrew Harrer/Bloomberg

Boeing Co. (BA:US) delivered 150 aircraft in the three months through June, positioning itself to meet a 2012 target even with year-to-date shipments of the new 787 and 747-8 models at only about a third of the planemaker’s goal.

Only six Dreamliners were shipped in the quarter, bringing the half-year total to 11, and Boeing handed over seven 747-8 jumbo jets for a six-month tally of 13, the Chicago-based company said today in a statement. Boeing’s plan, reiterated in April, is to deliver 70 to 85 of those models this year, split about evenly between them.

Total production is slated to increase by more than 60 percent in the four years through 2014 as Boeing works off a record order backlog for about 4,000 aircraft. The company delivered 287 planes in the first half out of a full-year goal of 585 to 600 aircraft. That compares with 477 deliveries in 2011, including 222 in the first six months.

“While revenue is impacted by lower than anticipated deliveries of 747 and 787, profitability should be enhanced by the higher deliveries” of other models including the 737 and the 777 in the second quarter, Stephen Levenson, an analyst with Stifel, Nicolaus & Co., wrote in a note today. “We are keeping our conservative outlook for deliveries for the balance of the year.”

Boeing, which is slated to report quarterly earnings on July 25, rose 0.2 percent to $74.44 at the close in New York trading. The shares have risen 1.5 percent this year.

Air India

The higher-than-expected number of 737s and 777s delivered last quarter may contribute almost 10 cents a share to earnings, Carter Copeland and Joe Campbell, analysts with Barclays Plc, wrote in a note to clients. The light 787 deliveries “will have limited impact on earnings per share given the low margin on the program,” they wrote.

In the first half, Dreamliner deliveries were set back by the discovery of improperly installed shims that had to be replaced on all 55 planes built as of February. Air India Ltd. also pushed back the handover of its first 787 amid talks over compensation for the three-year delay to the jet’s entry into service. There were no Dreamliner deliveries in February or May.

Second-quarter weakness in shipments appears to be related to customer timing issues rather than manufacturing problems, the Copeland and Campbell wrote.

Boeing expects to increase 787 deliveries in the second half as it ramps up to building five jets a month later this year and starts delivering planes from its new final-assembly line in South Carolina as well as the main one near Seattle.

Last year, Boeing missed its target of delivering 15 to 20 of the two new models, which both entered service in the fourth quarter of 2011. The planemaker delivered just three Dreamliners and nine 747s. Boeing, which has unfilled orders for 845 of the composite Dreamliners, is increasing output of that plane to 10 a month by the end of 2013.

The company had won orders for 440 new jets through June 30, net of cancellations, according to its website update today. The majority of those orders are for the new 737 MAX model that Boeing began selling late last year. The company reported 230 orders in the first six months of 2011.

To contact the reporter on this story: Susanna Ray in Seattle at

To contact the editor responsible for this story: Ed Dufner at

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