Industrials

Boeing has fallen on some hard times. Its 737 MAX jets have run into more problems while the Airbus A320 family of jets — the MAX’s competition — has extended its lead in the key single-aisle segment of the jet market. Boeing can still lay claim to market dominance in twin-aisle, wide-body jets, though. How it has maintained the lead in that segment gives clues to how it can win back share in the 737-size jet market. Over the past 15 years, Airbus has delivered just over 1,800 twin-aisle jets. Boeing has delivered almost 2,600, giving it about 58% market share. What’s more, Boeing has about 70% of the backlog for new twin-aisle jets, based on order figures reported by both companies. Things are getting better for Boeing in the wide-body market. That’s the reverse of what’s going on in the single-aisle jet market. Airbus has accounted for about 57%

By Sharon Terlep Boeing is reworking 50 undelivered 737 MAX jets after a supplier’s employee recently found misdrilled holes on some fuselages, a new production snafu for the aircraft manufacturer. Spirit AeroSystems, which has been at the center of quality issues affecting 737s, supplied the fuselages. Boeing said that the issue could delay some deliveries in the near term and that existing 737s can keep flying. “This is the only course of action given our commitment to deliver perfect airplanes every time,” Boeing’s commercial chief Stan Deal said in a memo to staff on Sunday. Boeing said it is finalizing instructions for the rework and expects to know how long it will take in coming days. Deal said the employee flagged to his manager two holes that may not have been drilled exactly to the jet maker’s requirements. Delays will allow the company to inspect and, if necessary, fix any

Boeing (BA) posted “strong” Q4 results backed by its free cash flow and “positive” commercial airplane operating margins, but the focus is now on inventory draw-down and supply chain stability, RBC Capital Markets said in a note to clients emailed Thursday. “The story for 2024 is about inventory liquidation as the FAA keeps a lid on near-term MAX production increases,” said RBC analysts Ken Herbert and Stephen Strackhouse. The investment firm kept the company’s outperform rating and cut the price target to $260 from $285. For its Q4, Boeing posted a narrower core loss of $0.47 per share from its $1.75 per-share loss a year earlier. Analysts surveyed by Capital IQ expected a core loss of $0.79 per share. Revenue for the quarter increased to $22.02 billion from $19.98 billion a year earlier. Analysts expected $21.08 billion. While Boeing has “withheld providing detailed 2024 guidance,” it indicated that the $4.4

Boeing CEO David Calhoun says that Alaska Air door-plug blowout doesn’t negate quality improvements the company has made on its 737 MAX jets since a pair of fatal crashes in 2018 and 2019. “Wasn’t the 737 line the most scrutinized product line in the word?” Bank of America analyst Ron Epstein asked Calhoun on a call to review Boeing’s financial results. “What happened to get to where we’ve gotten today?” Calhoun said quality on the 737 line has steadily progressed since the crashes and quality numbers have improved. “I think I understand your underlying context for the question but I take exception to the premise.”

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: Our 12-month target of $194, down from $209, reflects a 25x multiple of projected 2025 EPS, below BA’s recent historical forward average, based on what we see as high regulatory risk. We lift our 2024 EPS estimate by $0.41 to $4.01 but cut 2025’s by $0.59 to $7.76. A Q4 operating loss per share of $0.47, vs. a loss per share of $1.75, was $0.32 better than consensus. The FAA is limiting BA, for now, to a delivery rate of 38 units per month for its flagship 737 MAX narrow-body aircraft while BA irons out process and manufacturing deficiencies. We think current consensus EPS estimates for 2024 and 2025 bake in a fairly rapid recovery in commercial aerospace deliveries, yet BA pulled forward guidance, and the Alaska