Investors who monitor the aerospace industry know how to endure frustration. The effective duopoly that Boeing
This week, Brazilian aerospace powerhouse Embraer
The company also saw deliveries maintain a healthy pace. Embraer delivered 25 commercial airliners and 23 corporate jets in the quarter. Even better, the company has seen the recovery in commercial aviation accelerate order flow, with 42 new orders set to hit the books in the next few months.
However, the argument in Embraer's favor also hinges on the many criticisms against Boeing. The beleaguered giant has had several embarrassing missteps over the past several years, suffering through more victories-turned-defeats than it would care to remember. As a general trend, the American aerospace giant has shown the alarming tendency to overpromise and underdeliver.
Earlier this year, the Chicago-based company stole the potentially $100 billion Air Force contract to build the next generation of aerial refueling tankers away from European rival EADS, Airbus' parent company. But to get there, Boeing undercut EADS so severely that it appears likely to lose money on the contract. Boeing observers also know well the litany of frustrations that have stemmed from its series of embarrassing delays involving its 787 Dreamliner program.
While Boeing certainly holds a dominant position in the aerospace and defense realm, customers' patience can last for only so long. Eventually, the company will need to make good on its promises. At present, it's a glaring 0-for-2 on its last two major initiatives, both of which the company billed as major successes at their inceptions.
In picking an aerospace stock, I certainly much prefer the Embraer for its cheapness (11.8 P/E to BA's 14.9) and its emerging-market presence. Not convinced? Feel free to share your opinions below.
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