Boeing Sets Records for 2013; Aerospace Thesis Remains Intact

Boeing (BA) revealed the tremendous strength of global commercial aerospace demand in a news release Monday. During 2013, the aerospace giant noted that it delivered a record 648 commercial deliveries, received a record 1,531 gross commercial orders for the year, and posted a record 5,080 units in its backlog of unfulfilled orders at the end of 2013. The 1,355 net commercial order mark for the year was the second-largest in company history. Boeing continues to execute well on its production rate increases, and three of its programs set records for deliveries during the year: the 737 program, the 777 program, and the 787 Dreamliner program. 2013 was a fantastic year across the board for Boeing and for much of the supply chain to which it remains inextricably tied. 

Image Source: Boeing

Boeing Commercial Airplanes highlights in 2013 included:

• Boeing Delivers 7,500th 737
• Boeing, Southwest Airlines Announce Launch of 737 MAX 7

• Boeing Opens New Everett Delivery Center

• Boeing Delivers 1,000th Airplane to China

• Boeing Launches 787-10 Dreamliner

• Boeing Begins Assembly of 1st KC-46A Tanker Aircraft

• Boeing Flies First 787-9 Dreamliner

• Boeing Completes 737 MAX 8 Firm Configuration

• Boeing to Increase 737 Production Rate in 2017

• Boeing, GOL Airlines Announce Collaboration to Increase Sustainable Aviation Biofuel Supply in Brazil

• Boeing 787 Dreamliner Reaches 1,000th Order with Etihad Airways

• Boeing Launches 777X with Record-Breaking Orders and Commitments

• Boeing Delivers First 747-8 with Performance-Improved Engines

Valuentum’s Take

There are few industries that we like more than the commercial aerospace industry (not to be confused with the airline industry, which we think is among the weakest). We like Boeing’s fundamentals and its dividend strength, but we continue to prefer ideas in the supply chain, namely Precision Castparts (PCP). The firm’s products are ubiquitous and do not depend on which jet maker delivers more planes in any given year. Precision is also a trusted, low-cost supplier–it has been delivering castings to the jet-engine makers for over 20 years (40 years in GE’s case). The company continues to be a holding in the Best Ideas portfolio.

Aerospace Suppliers: AIR, ATRO, COL, EDAC, HEI, HXL, PCP, SPR, TDY, TXT