After 40 Yrs, Iran As A Hot Issue In The West, Begins To Cool

Posted by: : Paul EbelingPosted on: July 24, 2014 After 40 Yrs, Iran As A Hot Issue In The West, Begins To Cool

After 40 Yrs, Iran As A Hot Issue In The West, Begins To Cool

BA, GE

Currently, public and private companies are make disclosures in filings with the US SEC, and with other regulators regarding future dealings with Iran.

Boeing Co. (NYSE: BA) filed its 10-Q with the SEC Wednesday morning, the giant plane builder announced that is has a preliminary agreement with a subsidiary of Iran Air for the potential sale of goods (airplanes, parts),  and services (maintainence).

US firms are required to file an “IRANNOTICE” filing with the SEC, this is not a signal that any illegal business is taking place.

In fact, 4 April 2014, Heffx-LTN learned that the US Treasury had granted licenses to Boeing and General Electric Co. (NYSE: GE) to sell parts to Iran to service its aging civilian air fleet, as part of an interim agreement over Iran’s nuclear program.

Boeing  filed its application earlier this year. Boeing’s IRANNOTICE filing said:

Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 and Section 13(r) of the Securities Exchange Act of 1934, as amended, notice is hereby provided that The Boeing Company has made disclosure pursuant to such provisions in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, which was filed with the US Securities and Exchange Commission on July 23, 2014.

The priorfiling, the 10-Q, listed the data as follows:

Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 and Section 13(r) of the Securities Exchange Act of 1934, as amended (the “Act”), require disclosure of certain activities, transactions or dealings relating to Iran that occurred during the quarter covered by this report. Disclosure is required even if the activities, transactions or dealings were conducted in compliance with applicable law.

During the second quarter of 2014, Boeing entered into an agreement and engaged in related discussions with Iran Air pursuant to a license from the US Office of Foreign Assets Control (“OFAC”). The agreement sets forth general terms and conditions with respect to the potential sale of certain goods and services related to the safety of flight, including airplane parts, manuals, drawings, service bulletins, and navigation charts and data. Boeing also engaged in discussions pursuant to the OFAC license with Iran Air Tours, a subsidiary of Iran Air, with respect to the sale of similar goods and services. Boeing applied for the OFAC license consistent with guidance from the US Government in connection with ongoing negotiations between the “P5+1″ nations and Iran related to, among other things, the safety of Iran’s civil aviation industry. Boeing generated no gross revenues or net profits during the second quarter in connection with these activities.

Dow Jones covered a story in November 2013 that Western firms were in eager to return to doing business with Iran amidst relaxed sanctions against it.

At that time, their report indicated that Iran urgently needed aviation products from the West. The nation’s air fleet of more than 150 jets from Airbus, Boeing and other plane makers consisted largely of outdated models with an average fleet age of more than 20 yrs.

At this time there are no forecasts about how much Boeing and other firms could win in additional business from Iran. We have seen estimates that the total f1st wave of post-sanctions business opportunities could be over $5-B, that covering multiple industries, not just the civilian aerospace opportunities.

It does not look like Boeing had generated business with Iran in Q-2, what happens going forward is another matter.

HeffX-LTN Analysis for BA:  Overall Short Intermediate Long
Bearish (-0.44) Bearish (-0.45) Very Bearish (-0.52) Bearish (-0.36)
HeffX-LTN Analysis for GE: Overall Short Intermediate Long
Neutral (-0.17) Neutral (-0.12) Neutral (-0.23) Neutral (-0.16)

Stay tuned…

HeffX-LTN

Paul Ebeling

 

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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.
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