Boeing Surpasses Airbus in Q1 Deliveries Despite Production Issues, Stock Falls Amid Challenges

Boeing has experienced an impressive start to 2023, delivering a total of 130 jetliners during the first quarter. This achievement has allowed the company to surpass its primary European competitor, Airbus, which managed to deliver 127 aircraft within the same time frame. A significant number of these deliveries took place in March, with Boeing handing over 64 commercial aircraft to customers. This feat marks the second-highest delivery month in the past four years for the American manufacturer.

The surge in deliveries can be attributed to the acceleration of rework on 737 MAXs and 787 Dreamliners that had been previously grounded or stored. This progress has been a challenge for Boeing, as the company strives to complete the necessary rework and ensure timely deliveries of all remaining aircraft while keeping up with current orders.

Boeing's current production rates stand at 31 aircraft per month for the 737 MAX and approximately three per month for the 787. This suggests that nearly half of the March deliveries came from parked aircraft. According to the Seattle Times, the March surge may have also been influenced by airlines taking early deliveries to prepare for the increased demand during the spring break and Easter holiday travel season.

In March, Boeing received orders for 60 aircraft, while 22 orders were canceled, resulting in a net increase of 38 new orders for the month. As of the end of March, Boeing's backlog included 5,356 aircraft. However, in order to adhere to US accounting standards, this figure is adjusted to 4,555. The unadjusted figures reveal 4,219 737s, 120 767s, 436 777s, and 581 787s in the unfilled orders column, with question marks hanging over 634 orders for 737s, 108 for 777s, and 59 for 787s.

The first quarter's 130 deliveries comprised 111 737 MAXs, 11 787s, four 777Fs, one 747-8F, one 767-300F, and two 737-800As. Boeing's stock currently ranks 24th in IBD's Aerospace/Defense industry group, with an EPS Rating of 27 out of 99.

Despite these accomplishments, Boeing recently identified a manufacturing issue with some 737 MAX aircraft. Although the company has emphasized that this problem does not pose an immediate safety concern, analysts predict a slowdown in final assembly as Boeing conducts the necessary inspections before transitioning to the final assembly stage. Even with this issue, Boeing is expected to achieve 400-450 deliveries, and its stock should find support at 200.

Boeing has faced considerable challenges since the grounding of the 737 MAX in 2019, following two fatal accidents. The aircraft has since returned to service, and Boeing has been working tirelessly to ramp up deliveries. The company's ability to increase production in 2023 and meet its delivery expectations of 570 aircraft will play a significant role in its stock performance throughout the year.