Ray of Light: Boeing says 787 still on schedule for Q1 2010 delivery

787 demand remains solid

Boeing added that market demand for the next-generation airliner remains strong, with 878 orders to-date from 57 customers.

Concerning production of all models, Boeing also said it expects to deliver 480-485 commercial planes this year.

Shares of Boeing (NYSE: BA) moved sharply higher on Tuesday at mid-day, up $1.24 to $32.23 amid a broad market rally.

The first delivery of the 787 Dreamliner has been delayed about two years due to parts shortages, problems with suppliers, and redesign work.

Nevertheless, major airlines remain eager to secure their first 787s, given what analysts expect to be its substantially lower operating costs. The creature-comfort-filled 787 will be the world's most efficient commercial airplane. That fact, combined with an expected 20-30% lower delivery price than Airbus' A350, is expected to enable Boeing to maintain its advantage in shorter routes over its Europe-based rival Airbus.

Stock Analysis: The 787 still holds the promise of being a truly innovative airplane -- a real fuel saver and one with many creature comforts to enhance the flying experience.

Even so, Boeing's stock is not a buy here; further, if you already own shares, I would not add to the position at this time. Instead, await further progress for the 787 -- specifically, the plane's first flight test in Q2 2009, as well as Q2 information on potential order deferrals/cancellations in 2009 for a variety of commercial planes, due to the U.S./global recessions. If substantial order deferrals/cancellations do not occur by the end of Q2, and if the U.S. and global recessions show signs of bottoming, Boeing may be a buy at that time. Stay tuned.



Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX. Lazzaro owns frequent flier miles in American Airlines (NYSE: AMR).