Boeing Takes Off with This Big Announcement
After finding a way out of the Dreamliner fiasco, Boeing (NYSE:BA) is back in the news for all the right reasons. The aircraft manufacturer announced it will speed up production on the long-awaited — and previously grounded — Dreamliner 787 jets by the end of the year, potentially exceeding their original estimates for 2013.
Reuters reported that the Washington-based aircraft giant could produce more than 80 Dreamliner planes by the end of 2013, a considerable leap from the 60 that were expected, by hitting a pace of 10 planes per month later on in the year. The company’s current pace of seven planes per month also marks an increase from the production standard set earlier this year.
This news puts Boeing in a strong position for the fourth quarter of 2013. Between bad press over the failure of the lithium batteries in Dreamliner planes and the expense of compensating several airlines for their subsequent grounding, Boeing experienced very rocky times earlier this year. However, the company responded swiftly with a fix for the battery issue and succeeded in getting its planes back in the air, despite the objections of observers concerned about their safety standards…
More complications from the batteries installed in Dreamliner planes could arise in the future, which would force the company to scale back production, yet for now Boeing is confident its solution to the battery issue will stand. There is a significant backlog of orders for many Boeing planes that will keep the company busy for most of the decade. While that guaranteed income is excellent news, it could prevent Boeing from scoring new contracts from customers who need planes sooner.
Boeing stock is at the moment trading at its highest point in five years, but that isn’t stopping some investors from believing it can go beyond its current price of $94.45. Analysts from Societe Generale upgraded Boeing stock to “hold” from a “sell” rating this morning, following the string of good news on the Dreamliner planes. If the company can continue to deliver flawless planes at a faster rate of production, few obstacles would stand in Boeing’s way.
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