What happened
Boeing (BA 1.82%) released weak August delivery numbers on a day when investors were already worried about the state of the economy. As a result, Boeing shares are falling more than the market averages, down more than 5% in midday trading.
So what
Boeing came into 2022 hoping to bounce back after a number of difficult years for the aerospace giant. Issues with the 737 MAX stunted growth in 2019, and the pandemic soon after caused airlines to scale back growth plans and suspend airplane orders.
Demand for new planes is returning, but perhaps not as fast as investors had hoped. On Tuesday, Boeing said it delivered 35 planes in August, including its first 787 deliveries in nearly two years. The 787 had been in a holding pattern while Boeing and its regulator worked out a plan to inspect for and correct cracks in its carbon fiber body.
NYSE: BA
Key Data Points
The delivery total is an improvement over the 26 in July, but down from 51 in June. Boeing and archrival Airbus, which delivered 39 planes during the month, have warned that continuing supply chain issues are crimping production and leading to a decline in deliveries.
Boeing shares are also likely feeling the impact of the hotter-than-expected inflation numbers that were released on Tuesday, which is a drag on the broader markets. Investors are worried that the Federal Reserve's effort to fight inflation could send the economy into a recession, which in turn could limit demand for air travel and cause airlines to rethink their growth plans heading into 2023.
Now what
There's plenty of room for Boeing to soar from here. The company is one-half of a global duopoly and the long-term forecast for travel suggests the world will need a lot more airplanes in the years to come. The question is how long it will take for the growth story to materialize. So far, there is nothing to suggest a surge is imminent.
Given Boeing's quality problems and other issues in recent years, investors understandably aren't willing to wait in a holding pattern for clarity on where the economy is going. In this macroeconomic environment, it will likely be difficult for Boeing shares to take flight.
