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Lower Defense Deliveries May Hurt Boeing (BA) in Q1 Earnings
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The Boeing Company’s (BA - Free Report) Defense, Space & Security (BDS) segment is likely to have recorded dismal revenues in first-quarter 2022. However, the strong performance delivered by space programs might have benefited the bottom line.
Boeing’s first-quarter 2022 results are scheduled to be released on Apr 27.
Steady Order Flow to Aid Backlog
With the U.S. administration spending significantly on the nation’s defense in recent years, Boeing’s defense and space unit has been witnessing solid order flow from the Pentagon, NASA and Congress for its various products. This, in turn, has been consistently boosting the BDS unit’s backlog.
Keeping up with this usual trend, the BDS unit won some significant orders during the first quarter. These included a $1.64 billion deal for the repair, replacement, required availability, configuration management, and inventory management to support V-22 aircraft. The company also clinched a $195 million deal for procuring six MH47-G renew rotary-wing aircraft. We expect the upcoming results to reflect this order count in terms of a solid backlog figure for the BDS unit.
Boeing’s first-quarter 2022 defense delivery figures reflected a decline from the year-ago period.
In the quarter, its defense deliveries totaled 41, which dropped 2.4% from the year-ago period’s reported figure. Such a decline in deliveries is likely to have hurt the defense segment’s revenues in the soon-to-be-reported quarter. On a brighter note, the stable demand for space programs like the Space Launch System (SLS) is expected to have contributed favorably to the overall Q1 performance of the BDS unit.
The Zacks Consensus Estimate for the company’s defense unit revenues, pegged at $6,619 million, indicates a decline of 7.9% from the year-ago quarter’s reported figure.
Earnings Prospects
While lower defense deliveries might have been a drag on the BDS unit’s overall margin performance, solid performance from space programs might have boosted its first-quarter earnings.
The Zacks Consensus Estimate for the company’s defense unit earnings, pegged at $578 million, indicates an improvement of 42.7% from the year-ago quarter’s reported figure.
What the Zacks Model Unveils
According to the Zacks model, the combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — increases the odds of an earnings surprise.
Boeing currently has an Earnings ESP of +1.72% and a Zacks Rank #5 (Strong Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few defense companies that you may want to consider as these have the right combination of elements to post an earnings beat this season:
Northrop Grumman has a four-quarter average earnings surprise of 11.05%. The long-term earnings growth rate of NOC stands at 6.2%. The Zacks Consensus Estimate for Northrop’s first-quarter sales and earnings is pegged at $8.88 billion and $5.95 per share, respectively.
Spirit Aerosystems (SPR - Free Report) has an Earnings ESP of +9.34% and a Zacks Rank #3. It has a four-quarter average negative earnings surprise of 14.56%.
The long-term earnings growth rate of SPR stands at 8.5%. The Zacks Consensus Estimate for Spirit Aerosystems’ first-quarter sales is pegged at $1.09 billion. The consensus estimate for the bottom line is pegged at 61 cents per share, respectively.
CAE (CAE - Free Report) has an Earnings ESP of +11.11% and a Zacks Rank #3. CAE delivered a four-quarter average earnings surprise of 0.72%.
The long-term earnings growth rate of CAE is pegged at 8%. The Zacks Consensus Estimate for CAE’s first-quarter sales and earnings is pegged at $744.5 million and 18 cents per share, respectively.
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Lower Defense Deliveries May Hurt Boeing (BA) in Q1 Earnings
The Boeing Company’s (BA - Free Report) Defense, Space & Security (BDS) segment is likely to have recorded dismal revenues in first-quarter 2022. However, the strong performance delivered by space programs might have benefited the bottom line.
Boeing’s first-quarter 2022 results are scheduled to be released on Apr 27.
Steady Order Flow to Aid Backlog
With the U.S. administration spending significantly on the nation’s defense in recent years, Boeing’s defense and space unit has been witnessing solid order flow from the Pentagon, NASA and Congress for its various products. This, in turn, has been consistently boosting the BDS unit’s backlog.
Keeping up with this usual trend, the BDS unit won some significant orders during the first quarter. These included a $1.64 billion deal for the repair, replacement, required availability, configuration management, and inventory management to support V-22 aircraft. The company also clinched a $195 million deal for procuring six MH47-G renew rotary-wing aircraft. We expect the upcoming results to reflect this order count in terms of a solid backlog figure for the BDS unit.
The Boeing Company Price and EPS Surprise
The Boeing Company price-eps-surprise | The Boeing Company Quote
Revenue Expectations
Boeing’s first-quarter 2022 defense delivery figures reflected a decline from the year-ago period.
In the quarter, its defense deliveries totaled 41, which dropped 2.4% from the year-ago period’s reported figure. Such a decline in deliveries is likely to have hurt the defense segment’s revenues in the soon-to-be-reported quarter.
On a brighter note, the stable demand for space programs like the Space Launch System (SLS) is expected to have contributed favorably to the overall Q1 performance of the BDS unit.
The Zacks Consensus Estimate for the company’s defense unit revenues, pegged at $6,619 million, indicates a decline of 7.9% from the year-ago quarter’s reported figure.
Earnings Prospects
While lower defense deliveries might have been a drag on the BDS unit’s overall margin performance, solid performance from space programs might have boosted its first-quarter earnings.
The Zacks Consensus Estimate for the company’s defense unit earnings, pegged at $578 million, indicates an improvement of 42.7% from the year-ago quarter’s reported figure.
What the Zacks Model Unveils
According to the Zacks model, the combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — increases the odds of an earnings surprise.
Boeing currently has an Earnings ESP of +1.72% and a Zacks Rank #5 (Strong Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few defense companies that you may want to consider as these have the right combination of elements to post an earnings beat this season:
Northrop Grumman (NOC - Free Report) has an Earnings ESP of +1.32% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northrop Grumman has a four-quarter average earnings surprise of 11.05%. The long-term earnings growth rate of NOC stands at 6.2%. The Zacks Consensus Estimate for Northrop’s first-quarter sales and earnings is pegged at $8.88 billion and $5.95 per share, respectively.
Spirit Aerosystems (SPR - Free Report) has an Earnings ESP of +9.34% and a Zacks Rank #3. It has a four-quarter average negative earnings surprise of 14.56%.
The long-term earnings growth rate of SPR stands at 8.5%. The Zacks Consensus Estimate for Spirit Aerosystems’ first-quarter sales is pegged at $1.09 billion. The consensus estimate for the bottom line is pegged at 61 cents per share, respectively.
CAE (CAE - Free Report) has an Earnings ESP of +11.11% and a Zacks Rank #3. CAE delivered a four-quarter average earnings surprise of 0.72%.
The long-term earnings growth rate of CAE is pegged at 8%. The Zacks Consensus Estimate for CAE’s first-quarter sales and earnings is pegged at $744.5 million and 18 cents per share, respectively.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.