The Obama years have been good for Boeing, the world’s biggest aerospace company, but most of its gains have been made on the commercial side. Surging demand for jetliners has lifted the company’s share price from below 30 around the time that President Obama was inaugurated to over 140 today. Unfortunately, history tells us that demand for commercial transports is cyclical; it wasn’t so long ago that the defense side of the house was contributing 50% of revenues (versus about 30% today). So Boeing’s defense business needs to be ready to take up the slack when jetliner demand softens. The defense areas where company execs see the biggest opportunities going forward are military derivatives of commercial transports; new production and upgrades of rotorcraft; satellites for military, civil and commercial users; aerospace-related technical services; foreign sales of military aircraft; and remotely-piloted combat systems. I have written a commentary for Forbes on Boeing’s future defense prospects here.
Find Archived Articles: