Aerospace & Defense

Boeing Deliveries Again in Single Digits for July

Boeing Co. (NYSE: BA) delivered just 20 new airplanes in the second quarter of this year. On Tuesday, the company reported that it delivered a mere four new commercial jets in the month of July.

Yet the company’s stock gained 5.5% on Monday and had added more than 3% more by the noon hour Tuesday. Investors appear to be looking for good news about the company wherever they can find it.

Two bits of news pushed the stock higher Monday. First, the number of new U.S. cases of COVID-19 has been trending lower. Second, the number of passengers boarding flights at U.S. airports on Sunday topped 830,000, according to the Transportation Security Administration. That’s the highest one-day total since March 17.

While both data points are good news, their effect on Boeing’s actual performance is certainly negligible. No amount of generally good news can make up for the fact that Boeing is not selling airplanes.

Even more troubling is the number of cancellations the company is receiving. Customers for Boeing’s 737 Max have canceled 416 orders so far this year, according to Bloomberg data, and Boeing’s year-to-date order total for all its commercial planes comes to just 59.

In July, Boeing delivered two 787-9 Dreamliners, one to Air France and the other to Turkish Airlines. The company also delivered two freighters: one 777F to DHL and one 767-300F to FedEx Express.

Earlier this month, the Federal Aviation Administration (FAA) announced the requirements Boeing would have to meet in order to get the 737 Max back in the air. CEO David Calhoun said he expected deliveries to be able to resume by year’s end.

As important as the recertification of the 737 Max is to Boeing’s near-term recovery, the damage caused to the entire airline passenger industry will take a few years to overcome.

Based on investor reaction to even a little good news, recertification of the 737 Max is likely to give the stock a significant lift. Some investors want to be sure to participate in that anticipated boost.

Boeing stock traded up about 3.4% in the noon hour Tuesday, at $185.46 in a 52-week range of $89.00 to $391.00. The consensus 12-month price target on the stock is $173.50.