Fuel prices rising, muted wide-body demand noted by analysts

 

Oil prices are rising and catching the attention of airline and aerospace analysts. Photo via Google images.

June 22, 2016: Our weekly synopsis of select analyst notes point to increasing fuel costs and weak wide-body demand, among other things, as issues to consider.

Highlights:

  • A350 deliveries at risk due to Zodiac supplier issues. (Buckingham.)
  • US airline stock is under pressure due to rising fuel prices. (Cowen & Co.)
  • Stock for supplier Crane is rising due in part to rising oil prices. (CanaccordGenuity.)
  • Global traffic growing at a slower rate than forecast. Wide-body demand muted. (JP Morgan.)
  • Production rate increases at Boeing may be challenging. (Wells Fargo.)

Read more

Spirit Aerosystems: Higher profits on lower revenue

July 29, 2015: Spirit Aerosystems, whose principal business is a major OEM supplier to Boeing but which also makes fuselage panels for the Airbus A350, reported lower revenues but higher profits for the FY2Q2015.

The press release is here.

Revenues were down because the company sold its Gulfstream wing sector and lower revenues were recognized from the Boeing 787 program.

“Preparing for aircraft rate increases is a key focus for us this year. Near term, we are capitalizing to increase the production rate of the 787 to 12 shipsets per month and the 737 to 47 shipsets per month, as well as the higher production rates on the A320 and A350 programs,” said Larry Lawson, CEO.

Wells Fargo has this initial reaction:

Read more