Boeing Bags a Big One
Reporting its blockbuster earnings last month, Boeing (NYS: BA) confided to investors that it's got a bit of a problem buried in the baggage hold: Its sales force has been so successful of late that Boeing is having trouble working through the backlog as fast as the company had planned. Already, Boeing has had to up production on the classic 737 airliner four times in a row to keep up demand, while also accelerating the build rate on its 777 long-haul airplane as well.
Well, cry Boeing a river, folks, but Boeing's "problem" just got worse.
Boeing's amazing, incredible, ever-expanding tail
Over the weekend, Boeing announced that a backlog "tail" that's already reached disturbing proportions is about to get even bigger. On Sunday night, Dubai-based Emirates Airlines signed on the dotted line to acquire 50 (count 'em, 50!) of Boeing's 777 passenger aircraft.
This haul would be worth $18 billion if the planes went for list price, making it Boeing's biggest airplane sale ever already.
"7" must be your lucky number
So $18 bilion. (And another $6 billion for the engines to power them, built by General Electric (NYS: GE) .) This would be pretty good news already... but we're not done yet. In addition to the base order, Emirates placed options on a further $8 billion worth of the Boeing aircraft. When you combine the new order, the options, and the $9.1 billion deal Boeing inked with Emirates last year, the Arabian airline has given Boeing $35 billion worth of business (potentially) in just two years' time.
And for those keeping score at home, the 100 Boeing 777s Emirates has ordered, or intends to order, exceed the 90 orders the airline placed for Airbus's A380 superjumbo jet. It's also 100 A350 airplane orders that won't go to Airbus, as it struggles to get its new A350-1000 redesign out the door.
All in all, I'd say it's looking like a great day to be a Boeing shareholder. Investors are bidding the shares up 2% in response to the news, and they're right to do so.
Care to place a wager on when Boeing will announce its next production ramp to help keep pace with all these new orders?Add the stock to your Watchlist, and we'll keep you updated on all the most important developments.
At the time this article was published Fool contributor Rich Smith does not own (or short) shares of any company named above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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