(BA) Boeing Lifts 737 and 777 Production Rate

The Boeing Company (BA) has decided to increase its production rate for the Next-Generation 737 to 42 airplanes per month from its current production rate of 31.5 airplanes. The company also raised production of 777 to 7 per month from 5, and plans to accelerate to 8.3 per month in the first quarter of 2013.

Boeing plans to steadily increase the production rate for 737 to 35 per month in early 2012, 38 per month in the second quarter of 2013 and then to 42 per month in the first half of 2014. Once implemented in the first half of 2014, the 737 program expects to build on an average two 737s each workday and nearly 500 airplanes each year.

The Boeing 737 is a short- to medium-range, twin-engine narrow-body jet airliner. The 737 has developed into a family of nine passenger models with a capacity of 85 to 215 passengers. Currently, Boeing has 65 net orders for the 737 program. The company currently manages a backlog of more than 2,100 of the 737 family.

Coming to the Boeing 777, the airplane is a long-range, wide-body twin-engine jet airliner manufactured by Boeing Commercial Airplanes. The aircraft has a seating capacity for over 300 passengers and can fly within a range of 5,235 to 9,380 nautical miles depending on the model. Presently, the company has 66 net orders for the aircraft.

Boeing is the largest aircraft manufacturer in the world in terms of revenue, orders and deliveries, and one of the largest aerospace and defense contractors. Due to the continuing recovery of the global economy, demand for Boeing’s Commercial Airplanes is benefiting from a steady improvement in passenger and freight traffic.

However, in the near term, headwinds over 787 delays and expected cutbacks in the U.S. defense budget loom large over the current valuation of the company. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

Based in Chicago, The Boeing Company is a premier jet aircraft manufacturer and one of the largest defense contractors in the U.S. The company mainly competes with Lockheed Martin Corporation (LMT) and Northrop Grumman Corporation (NOC).

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