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   Technology StocksBA: Boeing Company


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From: JakeStraw7/29/2005 12:47:40 PM
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The Boeing Effect
biz.yahoo.com
BusinessWeek Online
Thursday July 28, 8:17 am ET
By Michael Englund

News about Boeing (NYSE:BA) prompted something of a double hit for the U.S. economy on July 27. First, the Chicago-based aerospace giant posted a solid second-quarter profit report -- and issued upward-earnings guidance for 2006. Then, June's government report on durable goods, issued the same day, showed another solid round of aircraft orders. Moreover, aircraft orders have seen a colossal, two-month surge, as gauged by both Boeing and the Commerce Dept.

And that leads us at Action Economics to the conclusion that the frenzy in the friendly skies may have an analogue on terra firma: In one key respect, the aircraft industry's scramble is not all that different from the heated activity that characterizes the housing market.

The aircraft boom has been nothing if not impressive. Aircraft orders reported by Boeing surged to 200 in May and were a still-remarkable 162 planes in June. That has been matched by a comparable upswing in the aircraft component of the non-defense durable goods orders data, to a phenomenal $15.5 billion in May. This was followed by an almost equally extraordinary $11.4 billion in June.

HIGHER, EVER HIGHER. Both sets of measures are three or four times their trend levels, and early indications for July is that the explosion in aircraft orders shows no sign of abating. One-month jumps have been seen in the past, but this multi-month spike is off the charts.

The figures reflect an enormous two-month wave in unfilled orders as measured in the durable goods report for June. Unfilled orders have shown a nearly vertical surge over the past two months -- going from what had been a comfortable return to average levels as recently as April, to rising within hailing distance of a record high just two months later. By itself, a $6 billion order from Brazil, reported July 26, would push unfilled orders easily through the record, though other orders are piling up as well.

Boeing has conservatively boosted its forecast for aircraft assemblies in 2006 to 395 planes, from a 320 target for 2005. But we expect assemblies to reach at least 410 next year, paving the way for a 25% surge in shipments for this important industry in 2006 -- one that likely will be nearly repeated in 2007.

BEATING BOTTLENECKS. For the aerospace industry, it appears that the September 11 terrorist attacks instilled an overhang of caution on the ordering process for aircraft that lasted three years. But that reluctance has now resulted in an enormous delay in the ordering of planes needed to meet demand over the coming 10 years to 20 years.

As such, airlines and other operators are now scrambling to get their orders in so they won't face constraint bottlenecks as we approach the end of the current decade. The result? A frenzy in the global aircraft industry to buy before it's "too late."

If that sounds familiar, you're right. The aerospace industry froth is notably similar to the scramble underway to "get in" on real estate in pricey urban markets. Certainly, key differences exist. With housing, some economists have identified the process as a "price bubble," and no such pricing phenomenon is underway in aircraft.

But price may be less of a driving factor in the housing frenzy than people think. It's clear that the market remains red-hot, as the new-home sales data for June, also released July 27, indicate. But as we've said before, current real estate gains are not unprecedented (see BW Online, 06/22/05, "Housing Bubble -- or Bunk?"), and prior times of rising housing prices have lasted for prolonged periods, despite intuitive popular perceptions that prices are "too high."

WATCHING THE CLOCK. The activity may be simply shifting to another segment of the market, as evidenced by pricing data from the most recent new-home and existing-home sales reports. Just as the full stock of homes, as gauged by existing-home sales, are showing strength in price appreciation, builders of new homes seem to be skewing their production toward lower-priced product. This is following a shift toward higher-priced homes in 2004. Perhaps talk of a housing bubble has led to desires by builders to focus on large numbers of "quick hits" in the lower end of the price spectrum, due to fear that the bubble will pop.

The public talks much about the "housing bubble" in the context of price, which doesn't apply to the aircraft market. But both of these markets are experiencing a bubble in activity all the same. In total, both are currently characterized by aggressive attempts by buyers to "lock in" purchases of long-term investments before it is "too late."

Both sectors are important components of the fixed-investment component of gross domestic product, and thus both should fuel rapid investment growth over the quarters and years ahead. It appears that key battles for U.S. economic growth are being won in the air -- and on the ground.

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From: Mike McFarland9/26/2005 1:11:17 AM
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Boeing Reaches Agreement With Striking Machinists

Health-care benefits preserved, monthly pension contribution
goes up to $70 for each year served, an 8% bonus if contract
is approved, plus $3,000 bonuses in '06 and '07.

I predict that 80% will vote for the contract--this
is very good news for the region and the nation!

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From: sammy™ -_-11/16/2005 10:15:57 PM
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ABL YAL 1A AIRBORNE LASER, USA
airforce-technology.com

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From: Jacob Snyder9/18/2009 11:13:11 AM
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Airbus Sees Healthy Long-Term Demand for New Planes
By NICOLA CLARK NYT 9/18/09
nytimes.com

PARIS — While the world’s airlines will continue to suffer steep financial losses in the short term, Airbus predicted Thursday that demand for new aircraft would remain healthy over the next 20 years, based on expectations of steady air traffic growth in the developing world and the rapid expansion of low-cost carriers.

The company, the plane-making unit of European Aeronautic Defense & Space, forecast that airlines would buy nearly 25,000 new jets through 2028, with a market value of $3.1 trillion. That represented an increase of 2.7 percent from its previous forecast in February 2008, when air carriers were reeling from the initial brunt of the global economic crisis.

Airbus, which expects to secure orders for around 300 planes this year, also said the steep decline in world air traffic would probably stabilize in 2010 and could rise by as much as 4.6 percent — not far from the average 5 percent growth over the past 30 years. It forecast a decline in 2009 traffic of 2 percent to 4 percent.

“Air transportation is a growth industry and an essential ingredient in the world economy,” said John Leahy, the chief salesman for Airbus.

The International Air Transport Association said Wednesday that it expected the world’s airlines to lose a combined $11 billion this year on top of a $16.8 billion loss in 2008. But despite those hefty losses, Mr. Leahy said Airbus had seen relatively few order delays and cancellations.

“A lot of people have talked about massive cancellations in the recession, but that’s not really true,” Mr. Leahy said at a presentation in London. He said Airbus had received fewer than 40 cancellations this year, less than 1 percent of the company’s order backlog of around 3,600 planes. Still, he acknowledged that many customers were having difficulty securing financing and had postponed deliveries — some by several years.

“I think it’s going to be a difficult winter,” Mr. Leahy said, noting that while airlines had managed to fill most of their seats during the peak summer travel season, many had cut fares, leaving them with less cash.

“At some point, we see a continuation of some requests for deferrals, but even that is already included” in the 20-year forecast figures, he said. He declined to specify how many orders had been delayed so far.

The company’s U.S. rival, Boeing, has at least 64 order cancellations this year, almost all of them for its forthcoming 787 Dreamliner, which has been delayed more than two years by production snags.

Analysts have warned that the ballooning industry losses are almost certain to lead to additional delays and cancellations of orders in the months to come. Without steep cuts in production by both Boeing and Airbus, that could lead to significant surpluses of aircraft on the market, which could weigh heavily on jet prices. Analysts at UBS forecast last month that there would be a global surplus of 1,400 commercial jets by the end of this year.

“We’re still very cautious,” Mr. Leahy said by telephone, though he insisted that global overcapacity currently stood at no more than 350 planes. “Right now, there is more downside risk than upside potential.”

Airbus said it continued to see the greatest demand for passenger planes in the Asia-Pacific region, particularly in China and India. Asia was expected to account for 31 percent of new aircraft sales over the next two decades, followed by Europe, with 25 percent, and North America, with 23 percent. Sales in Europe and North America will largely be driven by the need to replace older, less fuel-efficient fleets, as well as by the continued expansion of low-cost carriers, which currently represent about a fifth of all seats sold.

More than two-thirds of the new planes to be sold will be single-aisle jets like the Airbus A320 and the Boeing 737, which are used heavily by low-cost airlines, Airbus said. Large twin-aisle planes like Airbus’s planned A350-XWB and the Boeing 787 will probably represent about 25 percent of the aircraft sold, while planes that seat 400 or more passengers — the A380 and the Boeing 747 — will be about 7 percent of the market.

The 20-year forecast from Airbus compared with one published by Boeing in June, which predicted sales of 29,000 commercial planes over the same period, down from a 2008 estimate of 29,400 planes.

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From: Dan34/3/2019 4:16:44 PM
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Annus Horribilis for Boeing
.
It's been a rough start to the year:

SLS Launch Vehicle delayed, again - competitor SpaceX has been booking success after success with its Falcon launch vehicles

KC-135 Tanker deliveries halted, again - this contract was originally won by Airbus but Boeing make a big political stink over it and was given the contract. Fool me once?

Lion Air crash - the certification process Boeing uses is now being called into question.

Ethiopian Air crash - after Boeing said there was nothing to worry about following the Lion Air crash makes Boeing and all aspects of its safety and certification processes look suspect.

Starliner spacecraft delayed - competitor SpaceX's Dragon Crew spacecraft has booked a picture perfect test flight. Starliner was planned to fly before Dragon Crew, but kept getting delayed.

But the stock is still up ~120% in the past 2 years vs S&P500 up ~20%. Their CAGR is about average but ROI (up to now, at least) has been well above average.

Prior to the last 2 years, Boeing had tracked pretty closely with the S&P500. Recent events look to result in a permanent change in their relationship with regulators, adding to costs. They may have to accept lower margins to complete current orders if the catch phrase "If it's Boeing, I'm not going" takes hold.

So they're now having problems in their defense business, their launch vehicle business, their spacecraft business, and their commercial aviation business. Can they keep up their current high stock price, given that some of that bad news could impact sales and profits for a long time?

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