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Delta Profit Take Off, Boeing Not So Much


As of Wednesday Delta has announced some very healthy earning for the year so far. Years of cutting costs and consolidating have finally paid off as the company has already had a nine percent jump in profits since the beginning of the year. Overall value of Delta is up forty percent over last year which. With the harsh winter weather, high oil prices due to the geopolitical issues concerning the Middle East, Ukraine, and Venezuela, and economic uncertainty yet the company has been able to turn a greater profit over the year prior.

Delta Taking Offdelta 1

All the worst factors have been ongoing for the airline industry and yet many airline companies like Delta have found the winning formula for turning a profit. Industry revenue is up 15.7 percent in the US, which is also the strongest globally right now over last year. As f yesterday, Delta’s stock rose 3.5 percent alone. Reports coming from the industry have been saying that the revenue just from corporations sending out their employees has been incredibly vigorous which is telling analysts that if corporations are allowing their employees to fly more frequently then the economy must be in well enough condition for the money to be being spent.

Dan Veru, of Palisade Capital Management has stated that, “The airlines are seeing a tremendous amount of traffic right now. They’ve all figured out how to make money and charge for everything.”

That being said, among the industry there are also high customer complaints that have also been factored into and against industry success. In May of this year Delta saw a huge upturn in customer complaints which has historically been the case for Delta, when compared to last year in May the same had occurred. Ticket prices have jumped in recent weeks and so have other charges as the airlines react to shifting global policy, the cost of fuel, and the overall costs of operation which cannot cut into the bottom line. Earlier in the week, Delta found itself in the news when the company had to divert a Tel Aviv destined flight to Pairs after a rocket fired by Hamas had landed near the Ben Gurion airport. Since the incident the FAA has implemented a temporary ban on all US commercial airlines from flying to Israel. Many experts that this temporary ban on flights bound for Israel will have little to no financial effect on Delta. The company has seen its profits being to take off as the company has also shown investors and customers alike the progress being made within the company as the company shows growth. Overall Delta has shown an impressive growth upwards of 2400 percent which significantly surpasses the industry average.

Boeing Beginning to Slipdelta 2

Aerospace manufacturer Boeing reported yesterday that the company had some solid quarterly earnings yet value of the stocks continued to subside. Sales were primarily being driven by a jump in commercial airline sales, which topped a 5 percent increase. As of yesterday, the cost of Boeing stock fell by 2.5 percent even though company spokesmen stated they had high confidence in the yearly projections for the company. As commercial jet liner order continue to pick up so too do their delivers of the products to hungry airline companies.

Yesterday Boeing stock closed roughly 3 dollars under what the shares had started out at that day. By the end of trading on Wednesday, Boeing shares were being treated at 126.71 dollars. The company had posted its quarterly earnings which have most likely contributed to the selloff of shares. The company fell just short of its projected earnings for the quarter to about 22.05 billion dollars. Last year the around this time the company celebrated its 8,000th delivery of their 737 and the delivery of their then brand new model the 787-9. While it is comforting to see that the sales of commercial jet liners rose to about 5 percent which is the equivalent of 14.3 billion dollars. This means that despite the geopolitical mess currently tying up world relations, the company has still been able to net 264 orders. The company is still behind on their deliveries for the year as the company owes customers roughly 5,200 planes with a total value of 377 billion dollars. Of the backlog owed, about 36 percent of the orders Boeing still has yet to fulfill are owed to international companies.

While Boeing has been seeing some positive attributes to their largely and disturbing trend, the company has still posted a rather large profit for the quarter. The boost in the sales of their commercial jet liners certainly does help, however market analysts believe that this primary sell off of Boeing stock is but the first of many. Delta on the other hand has shown that the consolidation, cutting of cost, and the infrastructure remodeling that the company has undergone is showing profitable improvement over previous years.

 

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