(BA) Boeing’s Dreamliner Set to Take off

The Boeing Company’s (BA) much touted 787 Dreamliner series airplane has received U.S. Federal Aviation Administration (FAA) and European Aviation Safety Agency (EASA) certifications having complied with all federal and European regulations. The certifications required for the Dreamliner’s commercial use were received during a ceremony at the company’s Everett, Washington, facility.

The first Dreamliner would be delivered to Japanese carrier, All Nippon Airways on September 25, 2011. The company until July-end had an order backlog of 827 Dreamliners from a global customer base of carriers and leasing companies.

The 787 Program of Boeing is the first passenger jetliner manufactured mostly of lightweight and environment-friendly composite material – a welcome change from traditional materials like aluminum and titanium. The new airplane is being preferred by airline companies owing to better fuel efficiency. It consumes 20% less fuel than other competing airplanes. The 787 Dreamliner can be configured in two versions – 787-8 priced at $185.2 million, which carries 210–250 passengers and 787-9 priced at $218.1 million that will fly around 300 people.

Boeing has a unique position as the largest aircraft manufacturer in the world in terms of revenues, orders and deliveries. Besides, it is one of the largest aerospace and defense contractors in the world. Also its revenues are spread across more than 90 countries around the globe.

Earlier, strong performance from the commercial airplanes business and stable core operations allowed Boeing to register a solid second quarter 2011. The company surpassed both the year-ago results and the Zacks Consensus Estimates. Boeing raised its earnings per share guidance range for fiscal 2011 to $3.90 – $4.10 from an earlier band of $3.80 – $4.00, riding on the back of encouraging numbers.

However, Boeing lowered its commercial airplane delivery guidance for 2011 to a range of 485–495, from 485–500 forecasted earlier. The reduction was due to lower planned deliveries in the second half of 2011 on development programs (especially 787 and 747-8 units).

The Zacks Consensus Estimates for third quarter 2011, fiscal year 2011 and fiscal year 2012 currently stand at $1.07 per share, $4.24 per share and $5.29 per share, respectively.

Boeing currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we are maintaining our ‘Neutral’ recommendation on the stock. This is in sync with other aerospace and defense behemoths like General Dynamics Corporation (GD) and Lockheed Martin Corporation (LMT).

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