In the third quarter of last year, Boeing Co. (NYSE: BA) delivered just five of its single-aisle 737 Max airplanes. In the just-completed third quarter, the company delivered even fewer: three.
Overall, deliveries of commercial jets fell from 62 in the 2019 third quarter to 28, with the largest declines coming in the tapering of 747 and 777 deliveries. Last year Boeing delivered 35 of its 787 jets, compared with just 13 deliveries this year. Deliveries of the 777 fell from 11 to just five.
Sequentially, total deliveries actually increased from 20 to 28 as production issues on the 787 were resolved, and Boeing delivered 13 of the planes in the third quarter, compared to just seven in the second quarter.
The third quarter of last year was the first full quarter that Boeing’s 737 Max was grounded. Some older models of the 737 family continue to be built, but the full roll-off of any 737 Max production makes the company’s situation look a bit better than it actually is.
Adding to the company’s woes, on Tuesday the World Trade Organization (WTO) has authorized the European Union to impose $4 billion in tariffs on U.S. imports “to retaliate against subsidies for American planemaker Boeing Co.” Late last year, the Trump administration imposed tariffs of $7 billion in imports from Europe. It’s unlikely that the European tariff will be imposed before the U.S. elections in November, but that’s not as much comfort to Boeing as it may be to the president.
Boeing’s Executive Vice President Greg Smith commented on deliveries:
We’re taking actions to resize, reshape and transform our business to preserve liquidity, adapt to the new market reality and ensure that we deliver the highest standards of safety and quality as we position our company to be more resilient for the long term. Our diverse portfolio, including our government services, defense and space programs, continues to provide some stability as we adapt and rebuild stronger for the other side of the pandemic.
Among those actions is the announced move of all 787 production to North Charleston, South Carolina, beginning next year.
Boeing shares traded down about 2% in the noon hour Tuesday, at $163.98 in a 52-week range of $89.00 to $377.42. The consensus price target on the stock is $177.14.
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