Boeing Stock Is Up. Deliveries Are Strong, but the Backlog Matters More.

Text size

Boeing

delivered more jets than expected in the second quarter and shares are rising in Tuesday trading. Deliveries aren’t the biggest reason investors should be excited, though.

Commercial-aerospace giant Boeing (ticker: BA) delivered 136 commercial airliners in the second quarter, including 60 jets in June. April and May deliveries came in at 26 jets and 50 jets, respectively.

Growth is good, and Boeing stock is up 1.9% in midday trading while the

S&P 500
and

Dow Jones Industrial Average
are up 0.4% and respectively.

Growth is good, but it’s an open question about what matters more to investors: Deliveries or orders. These days, deliveries seem to be what carries the day.

That makes some sense with both Boeing and

Airbus

(AIR. France) recovering from the Covid-19 downturn. The pandemic decimated air travel, and it also decimated the aerospace-supply chain. Component suppliers are struggling to ramp up production to meet normalizing demand for jets.

Investors shouldn’t lose sight of orders though. Boeing took in 407 new orders for jets in the second quarter. Orders exceeding deliveries means the backlog grew. That’s good for Boeing sales and earnings down the road, or runway.

Over the past 12 months, Boeing has taken in orders for almost 1,200 new jets and delivered 530.

It’s always good to have orders exceed deliveries. Practically speaking, the quarterly delivery number is also being received well by investors, because it’s better than Wall Street’s expectation for 112 units. More than expected means Boeing will have an easier time meeting or exceeding Wall Street quarterly earnings estimates.

---

Newsletter Sign-up

The Barron’s Daily

A morning briefing on what you need to know in the day ahead, including exclusive commentary from Barron’s and MarketWatch writers.

---

That will be a welcome change. Boeing has had trouble meeting analysts’ estimates, and has come up short in 15 of the past 17 quarters. Airbus, for comparison, has only missed three of the past 17 quarters.

As for the second quarter, Wall Street projects a loss of 85 cents per share on sales of $17.7 billion. Boeing lost 37 cents a share on sales of $16.7 billion in the second quarter of 2022.

Year to date, Boeing stock is up about 14%. Shares have added almost 60% over the past 12 months as investors have become more optimistic about the commercial aerospace recovering coming out of Covid.

Boeing’s second quarter numbers are due out in late July.

Write to Al Root at allen.root@dowjones.com