The US-China Trade War Is Not Hurting Boeing Yet

Apr 25, 2018

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Airplane manufacturer Boeing’s stock climbed 3% percent Wednesday morning after the company announced earnings that were much higher than expected for the first quarter of 2018.

Boeing’s total revenue for the first three months of 2018 was $23.38 billion, which showed a 6% increase compared to the first quarter of 2017.

The bump in revenue and share prices on Wall Street were especially good news for Boeing after weeks of swirling fears that a potential trade war between the US and China would negatively impact the aircraft builder’s bottom line. The company’s stock took a significant dip in March after Trump announced tariffs on Chinese aluminum and steel, and China retaliated with tariffs on American-made aircraft.

Many investors saw this as a threat to Boeing’s profits because the company makes major sales — to the tune of 300 planes worth $37 billion in its latest deal in 2017 — in the Chinese market. But the looming threat of trade war has so far not had a negative impact on the plane maker’s revenue.

Part of the profits boost can be attributed to Boeing’s climbing production and delivery rates. Earlier in April, the company said its deliveries rose 9% year over year so far in 2018. In the first quarter alone, Boeing delivered 184 aircraft and inked 221 net orders.

Among the aircraft delivered, 132 were new single-aisle 737s. There was also the delivery of the first 787-10 Dreamliner to Singapore Airlines and delivery of the first 737 MAX 9 to Lion Air Group. Boeing’s commercial airplanes sector accounted for $13.7 billion in overall revenue. The company’s backlog of orders clocks in at more than 5,800 airplanes valued at $415 billion.

Boeing CEO Dennis Muilenburg told CNBC earlier this year that by 2020, the company will shoot to build about 900 planes per year — or about one jet every 10 hours.

Featured image by Scott Olson/Getty Images.

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