Boeing's Big Week

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Big news for Boeing (NYS: BA) investors: On Thursday, the airplane builder announced that it has booked 17 new orders for its 777 jumbo jet. Customers Cathay Pacific and an entity to be revealed later are queuing up to lay out $5.3 billion (at list prices) for Boeing's jets.

Hooray?
According to Boeing, the company now has a backlog that stretches 293 777s long. To deal with the rising demand for the 777 (and not just the 777), Boeing is ramping production. The 777 in particular, which Boeing built at the rate of five planes per month at the start of the year, will rise to as many as 8.3 planes per month by early 2013. Backlog is a nice problem to have.

You'd think that would be the big news at Boeing this week. Even assuming sizeable discounts from list price (and Cathay confirms that it got "a significant discount"), this is a big order -- but it's not Boeing's biggest news. Not by a long shot.

No, the really big news at Boeing this week is that the company just confirmed that it's within spitting distance of achieving Federal Aviation Administration approval to begin delivering its 747-8F freighter and 787 Dreamliner. The former has completed flight testing, and the latter is expected to pass its final tests over the weekend -- clearing the way for FAA certification later this month and for deliveries to begin next month. Yes, Virginia, after three long years of delays, customers including Delta (NYS: DAL) , United Continental (NYS: UAL) , and AMR (NYS: AMR) will begin receiving their 787s (and 747-8s.)

Time to buy Boeing?
So ... is now the time to buy? In a word: no. Oh, I realize Boeing's going to get a price pop when the first 787s start touching down. Investors have been waiting so long for this, there's bound to be a relief rally on the news. Longer term, though, I just don't see value in the shares.

Already, suppliers like Spirit AeroSystems (NYS: SPR) have begun demanding compensation from Boeing for the damage that production delays have wreaked on their business plans. How long will it be before Honeywell, General Electric, and the rest follow suit? And then there are the claims from the Boeing customers. As companies up and down the supply chain begin clamoring for their pounds of flesh, Boeing could find its profits stripped to the bone.

Foolish takeaway
Beware, Boeing investors. Shares look cheap at 13 times profits, true. But the production-delay chickens are flying home to roost. Those chickens are hungry, and they're going to feed on Boeing's profits.

Can Boeing collect enough cash to feed suppliers, customers, and shareholders alike?Add the stock to your Fool Watchlist, and find out.

At the time this article was published Fool contributorRich Smithdoes not own (or short) shares of any company named above, butMotley Fool newsletter serviceshave recommended buying shares of Spirit AeroSystems Holdings. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has adisclosure policy.

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