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Aerospace giant Boeing reported strong aircraft deliveries in the second quarter. A higher number of orders means that the order book has increased, which is good for sales and profits.
Brendon Thorne/Bloomberg
Boeing
delivered more jets than expected in the second quarter and shares rise in Tuesday trading. Deliveries aren’t the main reason investors should be excited, though.
Commercial aerospace giant Boeing (ticker: BA) delivered 136 commercial jetliners in the second quarter, including 60 jets in June. April and May deliveries reached 26 jets and 50 jets respectively.
Growth is good and Boeing stock is up 1.9% at midday while the
S&P500
And
Dow Jones Industrial Average
are up 0.4% and respectively.
Growth is good, but it’s an open question about what matters more to investors: shipments or orders. These days, deliveries seem to be winning.
It makes sense with Boeing and
Airbus
(AIR. France) is recovering from the Covid-19 crisis. The pandemic has decimated air travel and also decimated the aerospace supply chain. Component suppliers are struggling to ramp up production to meet standardizing jet demand.
Investors should not, however, lose sight of the orders. Boeing booked 407 new jet orders in the second quarter. Orders exceeding deliveries mean that the order book has increased. It’s good for Boeing’s sales and profits on the road, or on the runway.
Over the past 12 months, Boeing has taken orders for nearly 1,200 new planes and delivered 530.
It is always good to have orders greater than deliveries. In practice, the number of quarterly deliveries is also welcomed by investors, as it is better than Wall Street’s expectations for 112 units. Higher than expected means Boeing will have an easier time meeting or beating Wall Street’s quarterly earnings estimates.
It will be a welcome change. Boeing has struggled to meet analyst estimates and failed in 15 of the past 17 quarters. Airbus, by comparison, has only missed three of the last 17 quarters.
As for the second quarter, Wall Street is forecasting a loss of 85 cents per share on sales of $17.7 billion. Boeing lost 37 cents per share on sales of $16.7 billion in the second quarter of 2022.
Year-to-date, Boeing stock is up about 14%. Shares have risen nearly 60% in the past 12 months as investors have grown more optimistic about the recovery of commercial aerospace in the wake of Covid.
Boeing’s second quarter figures are expected in late July.
Write to Al Root at allen.root@dowjones.com