Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

MarketScreener Homepage  >  Equities  >  Nyse  >  Boeing Company (The)    BA


News SummaryMost relevantAll newsOfficial PublicationsSector newsMarketScreener StrategiesAnalyst Recommendations

Boeing Seals $17 Billion Iran Deal -- WSJ

share with twitter share with LinkedIn share with facebook
share via e-mail
12/12/2016 | 02:49am EDT
By Robert Wall and Asa Fitch 

Boeing Co. clinched a deal to sell 80 jetliners to Iran, completing the first major agreement between a U.S. company and the Islamic Republic, just as the political winds are changing.

Planned aircraft sales by Chicago-based Boeing and European rival Airbus Group SE to Iranian carrier Iran Air are among the most high-profile transactions signed since Iran and Western powers concluded a nuclear accord that removed sanctions on Tehran. U.S. officials cleared the way for Airbus and Boeing to start contract talks in September.

Now, Western executives are trying to figure out whether President-elect Donald Trump will step in to slow, or stop, the tentative approaches many companies have already made.

The Boeing deal was first announced in June and officially sealed between Boeing and Iran on Sunday. It is valued at $16.6 billion, based on the company's list price, which doesn't include typical discounts. Airbus has a similar deal for jet sales to Iran pending.

The timing of the final announcement is awkward, given how the aerospace giant's relations with the president-elect were strained last week when he criticized the potential cost of replacing the jets that serve as Air Force One. A Boeing spokesman declined to comment on whether it informed the incoming administration about the progress of the Iran sale, but the company said in a written statement that the deal has the potential to sustain thousands of U.S. jobs. It has also said it will work with Mr. Trump on the cost of the Air Force One deal.

Boeing's Iran Air sales, because they involve a state-owned airline, require approval from the U.S. Treasury, State Department and Congress mainly linked to any potential financing arrangements, said people familiar with the sales process. This presents new potential obstacles to any transaction should Mr. Trump, an outspoken critic of the Iran deal, oppose these kinds of commercial openings with Iran.

An aide to Rep. Peter Roskam (R., Ill.), a critic of the Boeing deal, said it is likely Congress will oppose the deal next year and that the new administration is expected to block the aircraft transaction rather than force lawmakers to act.

Officials with the Trump transition team didn't respond to a request for comment about the Boeing aircraft sale to Iran.

Despite new wariness after the election of Mr. Trump, many big and small Western companies continue to move ahead with early plans to enter Iran. German conglomerate Siemens AG, French oil giant Total SA, French telecommunications firm Orange SA and British telecom giant Vodafone Group PLC are all among other big Western companies pursuing their own deals, with varying degrees of investment commitments.

Still, many have held back on big commitments. Royal Dutch Shell PLC, for instance, signed a deal last week to cooperate broadly in the energy sector with Tehran, but didn't commit to any specific investment.

Amid the transition in Washington, executives are likely to forgo the sort of specific, investment-heavy deal that might be unwound should Mr. Trump or Republican lawmakers turn against the commercial openings that have followed the nuclear deal.

"Iran is a big market and there's potential there, but we're not sure how the sanctions are going to go," said Anubhav Singh, the head of global sales and marketing at Afripipes, a South African telecommunications-equipment company exploring an entry into Iran. "We are being cautious and seeing how things pan out in the next five or six months."

Abercrombie & Kent Co., a luxury travel agency based near Chicago that recently began offering $5,695 guided tours of Iran for Americans, isn't planning a post-election pullback. It will react in response to changes in government policy, spokeswoman Pamela Lassers said.

"We are hopeful that President-elect Trump's extensive business and hospitality background will make him receptive to the value of the travel industry," she said.

The Boeing deal covers 15 of the company's 777-300ER long-haul jets and 15 of the newer 777X widebody aircraft under development, as well as 50 737 Max single-aisle jets. Boeing had said it might need to trim production of the existing 777 jet unless it won fresh orders.

Boeing has more than 5,700 jet orders valued at almost $500 billion, though the company needs to secure more deals for its the 777-30ER to avoid production cuts after a recent slowdown in deals. It also wants to avoid ceding market share to Airbus in Iran, where pent-up demand for domestic travel could mean the country might need as many as 400 new, more-efficient planes.

Iran's transport minister, Abbas Akhoundi, said the deal was "the first step for the renovation of the country's aviation fleet," and would soon be followed by concluding talks with Airbus, according to Iranian state news agency IRNA.

For Iran Air, replacing planes is a priority. After years of sanctions, some imposed after the Iranian revolution in 1979, the carrier operates some of the world's oldest airliners.

Airbus in January agreed to sell 118 planes to Iran Air in a deal valued at roughly $25 billion at list price. Airbus on Sunday declined to comment about talks with potential customers.

The Obama administration has encouraged the Boeing deal and others as part of a series of moves to cement its Iran policy, which has the nuclear agreement as its centerpiece. Mr. Trump has called the pact a bad deal and said the U.S. gave up too much for too little in return.

--Doug Cameron and Carol E. Lee contributed to this article.

Stocks mentioned in the article
ChangeLast1st jan.
AIRBUS SE 0.00% 122.84 Real-time Quote.46.28%
BOEING COMPANY (THE) 0.58% 386.41 Delayed Quote.19.13%
E.ON SE 0.85% 9.012 Delayed Quote.3.74%
VALUE8 N.V. -1.44% 5.46 Delayed Quote.16.88%
share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news on BOEING COMPANY (THE)
05:56aRYANAIR : plans 500-700 job cuts as O'Leary bags bonus
09/18AIR FORCE ANNOUNCES NEWEST RED TAIL : 'T-7A Red Hawk'; Secretary of the Air Forc..
09/18Canadian inflation falls to 1.9% in August on lower gas prices
09/18BOEING : and Safran Invest in Electric Power Systems; Strategic investment will ..
09/18BOEING : Delta Premium Select brings luxury to Buenos Aires on modified B767-400
09/18Indonesia to publish final report on Lion Air crash in November
09/18Malaysia's Malindo Air confirms passenger data breach
09/18South Korea's Eastar Jet asks cabin crew to take unpaid leaves amid mounting ..
09/17BOEING : House panel asks Boeing CEO to testify about grounded plane
09/17BOEING : Begins Assembling First KC-46A Tanker for Japan
More news
Financials (USD)
Sales 2019 85 805 M
EBIT 2019 4 171 M
Net income 2019 3 378 M
Debt 2019 14 139 M
Yield 2019 2,07%
P/E ratio 2019 66,2x
P/E ratio 2020 16,0x
EV / Sales2019 2,70x
EV / Sales2020 1,84x
Capitalization 217 B
Duration : Period :
Boeing Company (The) Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends BOEING COMPANY (THE)
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 25
Average target price 414,68  $
Last Close Price 386,41  $
Spread / Highest target 29,4%
Spread / Average Target 7,32%
Spread / Lowest Target -25,0%
EPS Revisions
Dennis A. Muilenburg Chairman, President & Chief Executive Officer
Jenette E. Ramos Senior Vice President-Supply Chain & Operations
Gregory D. Smith CFO, EVP-Corporate Development & Strategy
Theodore Colbert Chief Information Officer & SVP-Data Analytics
Gregory L. Hyslop CTO, Senior VP-Engineering, Test & Technology
Sector and Competitors
1st jan.Capitalization (M$)
BOEING COMPANY (THE)19.13%217 437
AIRBUS SE46.28%105 645
TEXTRON14.89%12 033
EMBRAER S.A.-10.06%3 501