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Boeing's 737 Deliveries Rebound From Midsummer Factory Meltdown

Boeing's 737 Deliveries Rebound From Midsummer Factory Meltdown

(Bloomberg) -- Boeing Co. delivered 61 of its highly profitable 737 jetliners in September, up from 48 a month earlier, taking a step toward recovery from supply shortages that disrupted production at a Seattle-area factory.

Key Insights

  • The increase shows progress in Boeing’s effort to smooth manufacturing problems. The planemaker brought in 600 mechanics to help tackle out-of-sequence work that left dozens of unfinished aircraft parked around the factory.
  • Mechanics are making headway on jets awaiting parts, enabling Boeing to deliver nine more 737s than it made at the current production pace of 52 a month. Monthly shipments of the narrow-body plane, Boeing’s biggest source of profit, have steadily improved since hitting a six-year low in July.
  • On a quarterly basis, Boeing delivered 190 commercial aircraft, 12 fewer than a year ago as shortages of cabin equipment slowed some wide-body shipments. Executives expect 737 production to improve and have left full-year delivery targets intact.
  • “We expect a full recovery in the fourth quarter,” Jefferies analyst Sheila Kahyaoglu said in a report to clients. Boeing will need to ship about 183 of its 737 planes to reach full-year targets, “which seems achievable given the production rate and current parked aircraft.”

Market Reaction

  • Boeing was little changed at $385.23 at 2:12 p.m. in New York.

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  • For more details on September orders and deliveries, click here
  • Shipments of Boeing’s 787 Dreamliner, another crucial source of cash, also rebounded in September, to 18 aircraft from 8 in August.
  • Boeing blamed the mid-summer meltdown on late deliveries of fuselages from Spirit AeroSystems Holdings Inc. and engines from a General Electric Co.-Safran SA joint venture.
  • Boeing continues to outperform Airbus SE, its European rival. The U.S. planemaker delivered 87 total aircraft in the month to 69 for Airbus, which faces production snags for its A320neo single-aisle family.
  • Aircraft orders told a similar story. Boeing scored 65 sales for September, bringing its net tally for the year to 631 planes. Airbus recorded 37 orders last month as it replaced sales supremo Eric Schulz, and has netted 256 sales so far this year.

To contact the reporter on this story: Julie Johnsson in Chicago at jjohnsson@bloomberg.net

To contact the editors responsible for this story: Brendan Case at bcase4@bloomberg.net, Tony Robinson

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