It's safe to say that the 2016 Farnborough Airshow was a disappointment for Boeing (BA 2.01%) investors.
Airlines and aircraft manufacturers typically announce a slew of aircraft orders at the largest air show of the year. Instead, Boeing walked away from Farnborough with hardly any new firm orders. In fact, the order drought was so bad that Boeing apparently felt compelled to "fudge" the numbers when reporting its sales activity for the week.
A successful show?
On Thursday, Boeing described the Farnborough Airshow as "highly successful," in a press release highlighting its order activity for the week. That's a stretch, to say the least.
Boeing did report 182 orders and commitments for commercial airplanes, worth $26.8 billion at list prices. But among those orders, only 20 were new firm orders, according to The Wall Street Journal. That compares to the 124 new firm orders that Boeing captured at least year's Paris Air Show.
Aside from the new firm orders revealed this week, Boeing's sales figures included 43 orders that had previously been attributed to unidentified customers and more than 100 "commitments" and "agreements" that still need to be finalized.
Boeing trots out an old order again
The worst part of Boeing's Farnborough order report is that its largest reported deal -- an "agreement" with Volga-Dnepr Group for 20 747-8 freighters -- wasn't even new. With a value of $7.6 billion at list prices, this represented more than a quarter of Boeing's reported deal volume at the air show.
This deal was announced more than a year ago at the 2015 Paris Air Show and was counted toward Boeing's $50.2 billion in reported orders and commitments there. What was then a "commitment" is now an "agreement," which signals some progress in nailing down the terms of the sale, but it still isn't a true firm order.
Four of the aircraft covered by this agreement have already been delivered, making their inclusion in the 2016 Farnborough order total especially dubious. However, there's no good reason for Boeing to include any of the Volga-Dnepr aircraft in this year's air show report, given that they were already counted last year. It just seems like a tactic to pad the numbers in a soft sales environment.
Not a single 777 order to be found
Boeing's biggest failure at the Farnborough Airshow was its inability to sell any 777s. This is the company's most important task right now, as it needs to bring in at least 40 777 orders annually for the next few years to keep the production line busy until the next-generation 777X enters service in 2020.
Year to date, Boeing has just eight net firm orders for the 777. CEO Dennis Muilenberg has said as recently as last month that Boeing is in the midst of serious discussions with up to a dozen customers regarding the current-generation 777. Unfortunately, none of those conversations has paid off yet.
Services were the bright spot
The biggest positive highlight for Boeing at the Farnborough Airshow came on the services side of the business. This is an area that new Boeing CEO Dennis Muilenberg has prioritized for growth as pricing pressure has increased in the commercial jet market.
Boeing won its biggest commercial services agreement ever this week, as Norwegian signed up for enhanced "GoldCare" coverage for its large and growing fleet of Boeing planes. Boeing also announced data analytics agreements with six airlines on Wednesday. Together, these services agreements will generate billions of dollars of revenue for Boeing over their lifetimes.
Still, considering that Boeing has more than $90 billion of annual revenue, services can only go so far toward bolstering its performance. Commercial aircraft sales generate the vast majority of Boeing's revenue. Thus, investors need to hope that more aircraft orders are coming soon, particularly for the struggling 777.