More Orders for Boeing's 737 MAX - Analyst Blog
03 Janvier 2013 - 1:45PM
Zacks
The Boeing Company (BA) has received an order
worth $6 billion at current list prices for 60 737 MAX airplanes
from Aviation Capital Group (“ACG”). The order, consisting of 50
737 MAX 8s and 10 737 MAX 9s was finalized last month.
The Boeing 737 MAX – is a new family of aircraft being developed by
Boeing Commercial Airplanes. It is based on the Boeing 737
Next-Generation family and is the fourth generation of the 737
family.
The Boeing 737 MAX is an improvised version of the Next-Generation
737. It has more advanced fuel efficiency as it is equipped with
new LEAP-1B engines from CFM International and improvements such as
the Advanced Technology Winglet. Apart from maintaining an 8%
operating cost advantage, Boeing 737 MAX’s developed technology
reduces fuel burn and CO2 emissions by nearly 13%. Moreover, its
noise footprint is 40% smaller than other current single-aisle
airplanes. The first delivery of 737 MAX is expected in 2017.
These non-comparable efficiencies have helped Boeing in creating a
remarkable number of orders. With this order in hand, Boeing now
has orders for 1,029 737 MAX airplanes from airlines and leasing
companies worldwide. In October 2012, Boeing had also received an
order worth $5 billion for 20 737 MAX 8s, 17 737 MAX 9s and 13
Next-Generation 737-900ERs.
Boeing is trying to move hand in hand with the growing number of
orders. During the first quarter of 2012, production had increased
from 31.5 to 35 airplanes per month. The company continues to
increase the production rate to 38 airplanes per month beginning in
2013 and 42 airplanes per month beginning in 2014. In first half of
2012, the majority of orders received were for 737 MAX.
Based in Chicago, Boeing Company is a premier jet aircraft
manufacturer and one of the largest defense contractors in the U.S.
The company’s customers include domestic and foreign airlines, the
U.S. Department of Defense, the Department of Homeland Security,
the National Aeronautics and Space Administration, other aerospace
prime contractors, and certain U.S. government and commercial
communications customers.
The Boeing Company is among the best positioned in its sector due
to its balanced exposure to commercial aircraft and defense
equipment. Boeing’s revenue exposure is spread across more than 90
countries around the globe.
Due to the continuing recovery of the global economy, demand for
Boeing’s Commercial Airplanes is benefiting from a steady
improvement in passenger and freight traffic. Moreover, this
continuous increase in number of orders would boost the company’s
top and bottom lines.
However, headwinds over the global airline industry along with
expected cutbacks in the U.S. defense budget are the major
concerns. The company presently retains a short-term Zacks #3 Rank
(Hold) that corresponds with our long-term Neutral recommendation
on the stock.
The company mainly competes with Lockheed Martin
Corporation (LMT) and Northrop Grumman
Corporation (NOC).
BOEING CO (BA): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis Report
NORTHROP GRUMMN (NOC): Free Stock Analysis Report
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