Market Overview

What Boeing Looked Like The Last Time It Went A Month Without Selling A 737

What Boeing Looked Like The Last Time It Went A Month Without Selling A 737

Beleaguered Boeing Co. (NYSE: BA) didn’t book any new 737 sales in March for the first time in about seven years after the 737 MAX model was grounded after two crashes in recent months that killed a total of 346 people. 

The Wall Street Journal reported this week that the last time Boeing failed to make a 737 sale was in May 2012.

While Boeing’s immediate future may be clouded as it works to fix a computer system problem being blamed by some for the crashes in Indonesia and Ethiopia, May 2012 was far from a signal of decline for the company.

Despite global economic fears at the time that had airlines skittish, Boeing was at the beginning of a huge period of success for the 737, its bestselling plane, and particularly for a new version that was just coming online that spring: the 737 MAX.

Boeing 7 Years Ago 

May 2012 started with economic news that energized Wall Street.

On May 1, the U.S. government released a report showing manufacturing activity grew the month before at its fastest in nearly a year. The market responded, with the Dow closing up 66 points, its highest in more than four years.

But for the airline industry, the picture wasn't as rosy. The commercial airline business faced pressure from rising fuel costs and economic worries in Europe. With fears the Greek debt crisis might keep spreading and several countries already in recession, consumers were pulling back. Europe would be in a recession by fall.

If airlines were spooked, it was only for a short time. As the U.S. continued to recover from its own Great Recession, economists started to predict passenger travel and airline revenue growth would return to pre-recession levels by 2013.

Orders for the new Boeing 737 Max started rolling in. And they were brisk.

“In fact, the 737 program set single-year Boeing records with 1,124 orders and 415 deliveries,” a very pleased Boeing CEO W. James McNerney Jr., wrote in the 2012 annual report.

“More than 900 of those orders are for our new 737 MAX, which has won nearly 1,200 orders since launch.”

Banner Year For Jetmaker 

It ended as a banner year for Boeing, which delivered 601 airplanes in the year, the most since 1999. Boeing was finishing a record 38 planes per month by the end of 2012, about seven more per month than at the beginning of the year.

United Airlines — now United Continental Holdings Inc. (NASDAQ: UAL) — bought 150 737s that year, pushing lifetime orders for the plane over 10,000.

In all, Boeing added $114 billion in new orders during 2012 and expanded its record backlog of planes on order to more than $390 billion, almost five times its annual revenue at the time. The company reported record revenue of $81.7 billion for the year.

Whether the company, headed since 2015 by CEO Dennis Muilenburg, will bounce back as nicely following its current troubles is uncertain.

While it didn’t have new orders in March, Chicago-based Boeing has a backlog for the 737 MAX of more than 4,600 planes, orders worth more than $400 billion — which means the plane still should factor heavily in Boeing’s profit over several years to come.

Then Vs. Now 

  • 2018 revenue: $101.1 billion
  • 2012 revenue: $81.7 billion
  • EPS for 12 months ending Dec. 31, 2018: $17.85 per share
  • EPS for 12 months ending Dec. 31, 2012: $5.11 per share
  • Current market cap: $205.96 billion
  • 2012 market cap: $56.8 billion

Price Action

Boeing’s share price was much smaller back then, closing the month of May 2012 at $69.61, down more than 7 percent from its share price of a bit over $75 at the beginning of the month.

Boeing shares were down 1.11 percent at $364.94 at the time of publication Wednesday. 

Related Links:

Boeing Is Feeling The Pressure

Jet Grounding Is Only Boeing's Second: Manufacturer Overcame Costly 2013 Stoppage

Delta Air Lines CEO: 'Great Start' To New Year

Boeing's Everett, Washington factory in October 2011. Photo by Jeremy Elson via Wikimedia

Posted-In: 737 MAX airlines Dennis MuilenburgNews Education Travel Top Stories General Best of Benzinga


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