The Boeing Company (BA) announced that it has finalized an agreement with Air Lease Corporation (AL) for supplying four 787-9 Dreamliners. Air Lease also exercised an existing option for procurement of four Next-Generation 737-800s. Overall, the order value came at above $1.2 billion.
The Boeing 787-9 Dreamliner is a slightly larger version of the 787-8 and will carry 250-290 passengers on routes spanning 8,000 to 8,500 nautical miles. The 787 provides airlines with higher fuel efficiency, resulting in high environmental standards. According to Boeing, the airplane uses 20% less fuel than its peers.
Boeing has a unique 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 from 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. However, the company recently raised its earnings per share guidance for fiscal 2011 to $4.30 – $4.40 from the earlier band of $3.90 – $4.10 buoyed by strong performance across its core businesses.
The guidance incorporates the delivery initiation of revenue boosters like the 787 Dreamliner and 747-8 series, which began in the third quarter. However, the company revised the Commercial Airplanes' deliveries guidance for fiscal 2011. Deliveries for fiscal 2011 are now expected to be approximately 480, down from the earlier range of 485 – 495. The reduction was due to lower planned deliveries on development programs (especially 787 and 747-8 units).
Boeing currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we are maintaining our Neutral recommendation on the stock. This is in sync with other aerospace and defense behemoths like General Dynamics Corporation (GD) and Lockheed Martin Corporation (LMT).
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