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Boeing (NYSE: BA) Dominates the Air

Written By Brian Hicks

Posted January 30, 2015

As you might have heard, Boeing’s (NYSE: BA) stock took off this week, leaving its competition on the tarmac.

The stock was at $132 on Tuesday but jumped during after-hours trading and opened at $137 Wednesday morning. Since then, it’s gone as far up as $148.

We began recommending Boeing at The Wealth Advisory over three years ago, and if you bought it when we first recommended it, you would have made a rousing 145% alongside our other 14,000 subscribers.

The aerospace company’s profits have soared due to the staggering amount of plane orders it’s received. Boeing delivered 195 planes last quarter, up from 172 in the fourth quarter of 2013. Overall, earnings from operations were up 11% in the commercial airplanes market in 2014.

As Boeing works through its considerable backlog — which already fills most of its production capacity through the end of the decade without including the constant influx of new orders — expect this trend to continue.

And Space

On top of its striking success in the commercial airplane sector, Boeing is expected to make its mark on the private space taxi industry as well.

In a race between SpaceX and Boeing to see who can build a viable way for American astronauts to get to space — specifically the International Space Station (ISS) — and back, Boeing is looking at an advantage.

BA is poised to win NASA’s first order for operational commercial missions up there where the air is rarefied. Each company’s contract with NASA guarantees at least two full crew rotation missions to the space station, plus options for up to six flights contingent on performance, through 2019.

These missions will launch when Boeing’s CST-100 capsule and SpaceX’s Crew Dragon spacecraft are approved by NASA to bear its animate and inanimate cargo. Each craft will fly on remote-piloted and crewed test flights to the ISS before either company gets the green light from NASA for the real thing.

Boeing and SpaceX both say they will be ready for astronaut transportation by December of 2017, which is when NASA’s agreement with Russia for crew launches ends.

Boeing has a crewed demonstration mission to the ISS with two astronauts planned for July 2017, while SpaceX has its first unmanned flight in late 2016, followed by a shakedown flight complete with a crew in early 2017.

Welcome Aboard, Mr. President

The Air Force recently chose the Boeing model 747-8 to become the new Air Force One, one of the most visible symbols of the United States.

The Boeing 747-8 is the only aircraft manufactured in the United States that, when fully realized, meets the necessary established capabilities to execute proper presidential support.

Boeing gladly accepted the Air Force’s decision to bypass all competition and opt for the 747-8, citing its 50-year history of building presidential aircraft.

The 747-8 is the only four-engine commercial jet Boeing makes, providing an extra margin of flight safety over the more common twin-engine planes.

Aerospace Dream

Boeing’s flagship, the 787 Dreamliner, is expected to yield the company even more cash in 2015. In the wake of a strong conclusion to 2014, BA expects to deliver even more commercial planes this year.

The massive cost of developing the Dreamliner, the first commercial airplane substantially made with lightweight carbon composites in order to use less fuel, will pay off in spades.

The company’s revenue hit $90.76 billion last year, and company estimates put this year’s revenue between $94.5 and $96.5 billion, primarily on the strength of the Dreamliner. In 2015, Boeing expects to deliver between 750 and 755 commercial airplanes, up from a record 723 in 2014.

Deliveries of the 787 model increased to 114 last year from 65 the year before, and once Boeing shifts its production rate for the 787 Dreamliner to 12 each month in 2016 from its current 10, look for this trend to accelerate.