Boeing
released its September delivery numbers today. They aren’t that good, but investors don’t appear concerned. There is a good reason.
On Tuesday,
Boeing
(ticker: BA) said it delivered 27 commercial jets last month, including 15 737 MAX jets. Boeing delivered 35 jets in August, including 22 MAX jets, and in July, it delivered 43 jets, including 32 MAX jets.
That brings third-quarter numbers to 105 jets delivered, including 69 MAX jets. Wall Street was looking for 118 jets delivered, including about 77 MAX jets. The numbers look light.
Boeing shares, however, were up 3.1% in midday trading Tuesday, while the
S&P 500
and
Dow Jones Industrial Average
were up 0.7% and 0.6%, respectively.
The reason for the positive move isn’t that hard to figure out. Investors were already pretty glum on the quarter, thanks to falling Wall Street numbers.
Wall Street estimates for deliveries fell from about 137 jets to 118 jets over the past few weeks, and Boeing supply chain problems are partly to blame. Supplier
Spirit AeroSystems
(SPR) was having trouble delivering parts.
Falling delivery numbers led to reduced sales estimates as well. Wall Street expects Boeing will report third-quarter sales of about $18.5 billion, down from the $20 billion expected a few weeks ago. Boeing reported $16 billion in sales in the third quarter of 2022. Boeing also delivered 112 planes in the third quarter of 2022.
Investors have reacted to the cut by selling Boeing stock. Shares were still down about 9% over the past three months, through midday trading Tuesday, while the S&P 500 was off about 1% over the same span.
The stock market is always forward-looking. The reaction to the weak delivery numbers already happened.
Eventually, Boeing will have to increase production. Wall Street expects 548 deliveries in 2023. Boeing delivered 371 planes in the first nine months of 2023. That leaves 177 in the fourth quarter to hit the Wall Street consensus. That, like the third quarter number, is probably too high. Numbers will have to come down.
Some of that cut is likely reflected in the stock price already, too.
Investors expect things to get better down the road as Boeing, and the industry, continue to recover from Covid-induced lows. Wall Street expects more growth in coming years including 707 jet deliveries in 2024 and 779 deliveries in 2025.
Write to Al Root at [email protected]
Read the full article here
