boeing

BOMBARDIER INC. (Toronto symbols BBD.A $4.97 and BBD.B $4.98; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $8.5 billion; Price-to-sales ratio: 0.5; Dividend yield: 2.0%; TSINetwork Rating: Average; www.bombardier.com) is the world’s third-largest commercial-aircraft maker, behind Boeing and Airbus. Its aerospace division supplies roughly half of its revenue. The other half comes from its transportation division, which is the world’s largest maker of passenger railcars. In its 2011 second quarter, which ended July 31, 2010, the company earned $0.08 a share (all amounts except share prices and market cap in U.S. dollars). That’s down 27.2% from $0.11 a share, a year earlier. Revenue fell 17.5%, to $4.1 billion from $4.9 billion. The uncertain economy continues to hurt demand for Bombardier’s jets. It delivered 46 aircraft in the latest quarter. That’s down from 80 a year earlier. However, Bombardier received orders for 29 new planes (net of cancellations) in the latest quarter. A year ago, it had negative 38 net orders. The railcar division received $4.3 billion of new orders, up 43.3% from $3.0 billion a year earlier....

The recession forced airlines to cut spending on new planes, flight simulators and pilot training. However, airlines will have to start replacing their aging fleets in the next few years. That should spur a surge in orders for Bombardier and CAE. BOMBARDIER INC. (Toronto symbols BBD.A $4.97 and BBD.B $4.98; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $8.5 billion; Price-to-sales ratio: 0.5; Dividend yield: 2.0%; TSINetwork Rating: Average; www.bombardier.com) is the world’s third-largest commercial-aircraft maker, behind Boeing and Airbus. Its aerospace division supplies roughly half of its revenue. The other half comes from its transportation division, which is the world’s largest maker of passenger railcars. In its 2011 second quarter, which ended July 31, 2010, the company earned $0.08 a share (all amounts except share prices and market cap in U.S. dollars). That’s down 27.2% from $0.11 a share, a year earlier. Revenue fell 17.5%, to $4.1 billion from $4.9 billion. The uncertain economy continues to hurt demand for Bombardier’s jets. It delivered 46 aircraft in the latest quarter. That’s down from 80 a year earlier....

SPDR DOW JONES INDUSTRIAL AVERAGE ETF $112.30 (New York Exchange symbol DIA; buy or sell through brokers; www.spdrs.com) holds the 30 stocks that make up the Dow Jones Industrial Average. The fund’s top holdings are IBM, Exxon Mobil, Chevron Corp., 3M, Procter & Gamble, McDonald’s Corp., Johnson & Johnson, Caterpillar Inc., United Technologies and Boeing Co. The fund’s expenses are about 0.18% of its assets. SPDR Dow Jones ETF is a buy....

Exchange-traded funds (ETFs) may have a place in your portfolio. That’s because, unlike many other financial innovations, they don’t load you up with heavy management fees, or tie you down with high redemption charges if you decide to get out of them. Instead, they give you a low-cost, flexible, convenient alternative to mutual funds. ETFs trade on stock exchanges, just like stocks. Prices are quoted in newspaper stock tables and online. You’ll have to pay brokerage commissions to buy and sell ETFs. However, ETFs’ low management fees still give them a cost advantage over most conventional mutual funds. As well, shares are only added or removed when the underlying index changes. As a result of this low turnover, you won’t incur the regular capital-gains bills generated by the yearly distributions most conventional mutual funds pay out to unitholders....

SARA LEE CORP. $14 (New York symbol SLE; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 662.2 million; Market cap: $9.3 billion; Price-to-sales ratio: 0.9; Dividend yield: 3.1%; WSSF Rating: Above Average) should complete the sales of its remaining personal-care and household-product businesses by the end of 2010. Selling these operations will let Sara Lee focus on its more profitable food businesses, including making coffee, frozen bakery products and processed meats. Sara Lee will use the cash from these sales to buy back $2.5 billion to $3.0 billion of its shares over the next three years. The company’s plan to improve its productivity should also cut its annual costs by $350 million to $400 million by June 2012. Excluding unusual items, Sara Lee earned $746 million, or $1.08 a share, in the year ended July 3, 2010. Sara Lee is a buy....

Lockheed Martin, $75.45, symbol LMT on New York (Shares outstanding: 362.5 million; Market cap: $27.4 billion), is the world’s largest defence contractor. The company sells a wide range of products and services to governments and businesses around the world. Lockheed makes space and missile systems, electronics and information systems. The company also makes fighter planes, including the F-16, F-22 and F-35, as well as the C-130 military-transport plane and the Titan rocket. In the three months ended June 27, 2010, Lockheed’s revenue rose 3.3%, to $11.4 billion from $11.1 billion a year earlier. Earnings per share rose 4.8%, to $1.98 from $1.89. The latest earnings beat the consensus estimate of $1.78 a share. All of the company’s business segments contributed to the earnings gain....

SPDR DOW JONES INDUSTRIAL AVERAGE ETF $100.29 (New York Exchange symbol DIA; buy or sell through brokers) holds the 30 stocks that make up the Dow Jones Industrial Average. The fund’s top holdings are IBM, Exxon Mobil, Chevron Corp., 3M, Procter & Gamble, McDonald’s Corp., Johnson & Johnson, Caterpillar Inc., United Technologies and Boeing Co. The fund’s expenses are about 0.18% of its assets. SPDR Dow Jones ETF is a buy.

INTERNATIONAL BUSINESS MACHINES CORP., $125.26, New York symbol IBM, continues to expand its business-software operations. That’s because it earns higher profits from selling software and computer-management services than selling mainframe computers. This week, the company agreed to buy Sterling Commerce from AT&T (see below). Ohio-based Sterling makes software that helps automate and streamline transactions between businesses, such as buying raw materials and replenishing inventory. Sterling has over 18,000 clients. The sale will close later this year. IBM is paying $1.4 billion for Sterling. To put this figure in context, IBM earned $2.6 billion, or $1.97 a share, in the three months ended March 31, 2010....

UNITED TECHNOLOGIES CORP. $66 (New York symbol UTX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 933.1 million; Market cap: $61.6 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.6%; WSSF Rating: Above Average) has six main businesses: Pratt & Whitney makes aircraft engines (24% of 2009 revenue, 26% of earnings); Otis makes and services elevators (22%, 35%); Carrier makes heating and air-conditioning equipment (21%, 11%); Sikorsky makes helicopters (12%, 9%); Hamilton Sundstrand makes electronic aircraft controls (11%, 12%); and UTC Fire & Security sells burglar alarms and fire-protection services (10%; 7%). The U.S. government is the company’s biggest customer, and accounts for roughly 18% of its yearly revenue.

Recession hurt growth in 2009

Revenue rose 38.8%, from $42.3 billion in 2005 to $58.7 billion in 2008. However, revenue fell 9.8% in 2009, to $52.9 billion, as the recession cut demand for United Technologies’ aerospace and building-related products....

BOMBARDIER INC. (Toronto symbols BBD.A $5.40 and BBD.B $5.39, Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $9.2 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.9%; SI Rating: Extra Risk) is the world’s third-largest commercial-aircraft maker, behind Boeing and Airbus. Its aerospace division supplies roughly half of its revenue. The other half comes from its transportation division, which is the world’s largest maker of passenger railcars and commuter trains. Bombardier’s revenue rose 33.4%, from $14.8 billion in 2006 (its fiscal year ends January 31) to $19.7 billion in 2009 (all amounts except share price and market cap in U.S. dollars). However, its 2010 revenue fell 1.8% to $19.4 billion. That’s because it received fewer aircraft orders. This decline more than offset stronger railcar sales....