Despite a slump in September deliveries of its troubled 737 Max aircraft, Boeing (NYSE:BA)'s shares have surged. The aerospace giant delivered just 27 of the 737 Max planes in September, marking the lowest number since August 2021 and the fourth-lowest since the lifting of a worldwide grounding following fatal crashes. This dip in deliveries is attributed to ongoing rectification of a manufacturing defect.
Despite the delivery slowdown, Boeing's share price rose by 2.9% on Tuesday. This surge was attributed to an increase in new orders, including those from United Airlines and Air Canada, and an impressive delivery performance for other aircraft models during September.
The company has delivered a total of 371 planes in the first nine months of 2023, including 70 dispatched over the third quarter alone. Boeing is targeting between 400 and 450 plane deliveries for the full year.
In addition to the uptick in deliveries, Boeing's order book grew by 224 planes. This growth was primarily driven by Ryanair (LON:0RYA)'s $40 billion commitment for 150 units and United Airlines' acquisition of 50 Dreamliners. Ryanair also plans to purchase up to 300 more Max jets for delivery between 2027 and 2033.
As a result of these new orders, Boeing’s gross orders since January rose to 848 or 724 net after cancellations and conversions. Consequently, the company's commercial backlog increased, surpassing 5,000 for the first time since December 2019. As of Tuesday, Boeing's order book stands at a record high since December 2019 with a total of 5,172 planes.
Despite shares trading at $193 each and a projected group revenue rise of 16% to $18.51 billion, Boeing's six-month stock decline remains around 8.7%. According to InvestingPro data, the company has a market cap of 116.98B USD and a negative P/E ratio of -26.03. The company's revenue growth for the second quarter of 2023 was 21.18%, and the gross profit margin stood at 9.11%. However, Boeing has been experiencing some challenges as it is not profitable over the last twelve months, and it does not pay a dividend to shareholders, as per InvestingPro Tips.
Analysts forecast a quarterly loss of -$3.07 in its earnings report on October 25. This aligns with the InvestingPro Tips indicating that 11 analysts have revised their earnings downwards for the upcoming period and that analysts do not anticipate the company will be profitable this year.
In the meantime, certification for the smaller 737 Max 7 is still pending from the Federal Aviation Administration, with the first delivery postponed to 2024. Despite these challenges, investor scrutiny over the troubled 737 Max seems to be mitigated by the company's overall performance and promising order book.
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