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  • Boeing Tells 737 MAX Fuselage Maker To Pause Production

    Boeing Tells 737 MAX Fuselage Maker To Pause ProductionBoeing Co. (NYSE: BA) told its supplier of aircraft fuselages to pause production on four 737 MAX units and avoid starting work on another 16 units scheduled for delivery this year.The aircraft manufacturer said it's decision is tied to the coronavirus' devastating impact on the airline industry's finances and the need to avoid unnecessary production costs when airlines are canceling or postponing orders for new airplanes they no longer can afford. Airlines grounded most of their fleets in response to government travel bans and have been cutting all non-essential expenses to reduce red ink.The drawdown in 737 MAX fuselage orders from Boeing is another blow to Wichita, Kansas-based Spirit AeroSystems holdings, Inc. (NYSE: SPR), which has already experienced a significant reduction in output since the grounding of the 737 MAX aircraft fleet in March 2019 due to airworthiness concerns after two high-profile crashes that killed 346 people.Boeing resumed limited production in May after shutting down MAX plants in January. At the start of the year, Boeing and Spirit reached an agreement to ramp up production of 737 MAX fuselages to 216 in 2020, before reducing planned output to 125 shipsets – a big difference from its former production of 52 fuselages a month before the grounding."Spirit does not yet have definitive information on what the magnitude of the reduction will be but expects it will be more than 20 shipsets," the company said in a statement on Wednesday, June 10.Spirit said it is still in discussions with Boeing to determine its 737 MAX fuselage production for the remainder of the year.Spirit said it will place employees who work on the aircraft on a 21-day, unpaid furlough, effective June 15. It also said, effective this Thursday, the hourly workforce at its Tulsa and McAlester facilities will be reduced.Leeham News & Analysis reported that Boeing is currently producing about one 737 MAX airplane per month. The company has a backlog of 3,800 MAX orders, which reflects more than 500 suspended orders.At the start of the year, Spirit eliminated more than 4,500 jobs and reduced its executive pay by 20%.While the 737 MAX is designed for passenger travel, it does offer belly capacity for small or loose shipments, which is appreciated by freight forwarders and shippers.Southwest Airlines had placed the most orders for the 737, but is negotiating with Boeing on a revised order and delivery schedule. Boeing has produced 27 MAX aircraft for Southwest since safety authorities issued the no-fly order, but was not allowed to deliver them. The grounding hurt the airline's growth plans last year, but with travel demand falling through the floor due to the pandemic, Southwest doesn't need the airplanes anytime soon.Boeing expects to complete MAX recertification flights by the end of June to demonstrate to the Federal Aviation Administration that the plane can operate safely with changes to the flight-control system, according to CNBC.Spirit said it also remains concerned about the COVID-19 pandemic's impact on the production of other Boeing and Airbus [OTCMKTS: EADSY] aircraft, including its fuselages for the Boeing 787 and Airbus A350 planes.The company currently expects a second quarter revenue loss of about $70 million to $90 million on the 787 and $15 million to $20 million on the A350.(Eric Kulisch contributed to this article.)(Click to read more American Shipper/FreightWaves articles by Chris Gillis.)Photo Credit: Spirit AeroSystemsSee more from Benzinga * Today's Pickup: Samsara introduces Driver Efficiency Scores To Help Improve Driving Habits * E-commerce Drives Multi-Pronged Expansion At UPS Airlines * Vision Of Higher Net Sales For Airlines Could Be A Mirage(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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  • Why Jumbo, Santos, Westpac, & Zip Co shares are crashing lower

    Share price plummet

    It has been another disappointing day for the S&P/ASX 200 Index (ASX: XJO). Concerns over a potential second wave of COVID-19 in the United States has led to the index crashing 2.4% lower to 5,818 points.

    Four shares that have fallen more than most today are listed below. Here’s why they are sinking lower:

    The Jumbo Interactive Ltd (ASX: JIN) share price is down over 7% to $10.60. As well as being caught up in the market selloff, this morning S&P revealed that the lottery ticket seller would be dumped out of the ASX 200 at the next quarterly rebalance. Jumbo will cease being part of the benchmark index from the market open on 22 June 2020.

    The Santos Ltd (ASX: STO) share price is down 4% to $5.37. Investors have been selling Santos and other energy shares on Friday after a collapse on oil prices overnight. Concerns over a potential second wave of coronavirus in the United States has spooked traders. If people are forced into lockdown again, demand for oil could take a major hit.

    The Westpac Banking Corp (ASX: WBC) share price has fallen almost 5% to $17.65. Investors have been selling the banks again on Friday after Wall Street’s heavy decline. In addition to this, the banking giant revealed that AUSTRAC is further investigating matters that were brought to its attention by the bank recently. The financial intelligence agency has warned that it may amend its statement of claim to include allegations arising from these investigations.

    The Zip Co Ltd (ASX: Z1P) share price has dropped 6% to $6.12 despite releasing another positive trading update. The payments company’s update revealed that its strong growth continued in May. During the month, Zip recorded monthly transaction volume of $189.3 million and revenue of $15.6 million. This was a 63% and 78% increase, respectively, over the same period last year.

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    James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Jumbo Interactive Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has recommended Jumbo Interactive Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Why Jumbo, Santos, Westpac, & Zip Co shares are crashing lower appeared first on Motley Fool Australia.

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  • 3 top ASX dividend shares to add to your portfolio in June

    street sign saying yield, asx dividend shares

    Investors have witnessed many S&P/ASX 200 Index (ASX: XJO) and All Ordinaries (ASX: XAO) shares withdraw guidances and defer dividend payments across March and April.

    With uncertain times ahead, here are 3 top ASX dividend shares to watch. 

    1. Money3 Corporation Limited (ASX: MNY) 

    Money3 may not be a household ASX dividend share, but it represents a solid small-cap business with strong cash flow. It has also faced minimal disruption as a result of COVID-19.

    The company provides automotive finance for the purchase and maintenance of vehicles. It estimates that approximately 1 in every 500 vehicles in Australia and 1 in every 800 vehicles in New Zealand have a current Money3 loan. Despite potential COVID-19 concerns, the business has reported a “minimal” impact on cash collections. It is expecting demand to return for automotive finance as lockdown restrictions ease. 

    The company reported solid YTD March 2020 financial results, with earnings before interest, tax, depreciation and amortisation (EBITDA) growing 43.6%. Net profit after tax (NPAT) also soared 49.2% on the prior corresponding period. As at 27 April, the company had a cash balance of $43 million and currently pays a dividend yield of 6.25%. 

    2. Fortescue Metals Group Limited (ASX: FMG) 

    Despite the ASX 200 falling more than 3% on Thursday, the Fortescue share price held up held firm, falling a mere 0.73%. This follows news that the world’s largest iron ore miner, Vale SA was ordered to halt mining at its Itabira complex after 188 workers tested positive to coronavirus.

    At the same time, demand in China is firm with low port stockpiles. Australian majors BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue will be poised to benefit. In my opinion, Fortescue could be the better pick, given its pure exposure to iron ore. It currently pays a dividend yield of 7.02%. 

    3. Tassal Group Limited (ASX: TGR) 

    There are many consumer tailwinds for Tassal’s salmon and prawns business. In Tassal’s recent presentation to the Goldman Sachs Emerging Leaders conference, it highlighted the following trends: 

    • Rise in consumer demand for sustainable products that have traceability 
    • Rise in at-home meals over eating out 
    • Greater demand for easy to prepare meals solutions 
    • Online media consumption to play a larger role in purchasing decisions.

    From a supply perspective, Tassal highlighted that its strategic focus is to continually optimise biomass growth, size and sales mix to drive salmon EBITDA $/kg. I believe Tassal’s experience in sustainable farming practices in breeding, biosecurity, feed diet formulation, growth times and survival all attribute to bigger salmon that will generate better margins.

    In my opinion, Tassal should be a very consistent ASX dividend share into the future, and currently pays a dividend yield of 4.68%. 

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    Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post 3 top ASX dividend shares to add to your portfolio in June appeared first on Motley Fool Australia.

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