January 9, 2018 / 4:12 PM / a year ago

Boeing set to top Airbus with record 763 jets in 2017

NEW YORK (Reuters) - Boeing Co (BA.N) said on Tuesday it delivered an industry-record 763 jetliners in 2017, likely beating European rival Airbus SE (AIR.PA) to retain the title of world’s biggest plane maker.

Boeing's logo is seen during Japan Aerospace 2016 air show in Tokyo, Japan, October 12, 2016. REUTERS/Kim Kyung-Hoon

Boeing also booked 912 net new aircraft orders worth $134.8 billion at list prices last year, compared with 668 worth about $94 billion (£69.5 billion) in 2016.

Airbus was on track last month to rack up more than 1,000 gross new orders for the year, excluding cancellations, compared with the 1,053 gross orders Boeing announced on Tuesday.

The tallies confer more than just bragging rights; they show the companies’ ability to run factories smoothly, make sales and generate profit.

Boeing shares were up 2.9 percent at $319.16 on Tuesday afternoon. The stock has nearly doubled in the past year.

Industry sources say Airbus, which will report 2017 orders and deliveries on Jan. 15, met its target of delivering more than 700 jetliners, despite problems with Pratt & Whitney (UTX.N) Geared Turbofan engines.

Airbus’ total is still unlikely to match Boeing’s. The European firm cut its forecast from more than 720 jets in October due to delays in engine deliveries.

Boeing’s orders and deliveries confirmed the plane maker’s ability to hit rising production rates. This could mean an additional “$350 million in revenues versus our forecast,” said Sheila Kahyaoglu, analyst at Jefferies.

Boeing also said airlines likely will need more aircraft in 2018, keeping production rates rising.

The company expects airlines to boost passenger capacity by 5.5 percent to 6 percent this year, Randy Tinseth, Boeing vice president of marketing, said on a conference call.

With airlines already flying very full airplanes, more aircraft will be needed. “We’re expecting growth to be driven by new deliveries, not by more capability out of the existing fleet,” he said.

Price targets for Boeing’s stock are rising. The median is now $310 a share, up from $293.50 in October. Some targets are as high as $380. Still, 12 analysts rate it a “hold” compared with 13 with “buy” or “strong buy” ratings, according to Thomson Reuters data.

Meanwhile, air cargo traffic is rising, but a sustained gain could arrive too late to rescue Boeing’s 747 aircraft.

Boeing has 12 backlogged orders for 747s, about two years’ production. Tinseth said air cargo companies are interested.

“The question is when will they be in a position to buy,” he said. “They want to make sure that (demand is) sustained.”

Reporting by Alwyn Scott in New York and Ankit Ajmera in Bengaluru; Editing by Patrick Graham and Matthew Lewis

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