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Why Is Boeing (BA) Up 4.6% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Boeing Company (The) (BA - Free Report) . Shares have added about 4.6% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Boeing Beats on Q4 Earnings, Provides 2017 Outlook
Boeing reported adjusted earnings of $2.47 per share for fourth-quarter 2016, beating the Zacks Consensus Estimate of $2.34 by 5.6%. Reported earnings were also up 54.4% from the year-ago figure of $1.60.
The quarterly number reflects solid overall execution of production programs and services.
On a GAAP basis, Boeing reported earnings of $2.59 per share compared with earnings of $1.51 per share in the year-ago quarter.
2016 non-GAAP earnings were $7.24 per share, surpassing the Zacks Consensus Estimate of $7.12 by 1.7%, but decreasing 6.2% year over year. On a GAAP basis, earnings were $7.61 per share, up 2.3% year over year.
Revenues
The company's revenues amounted to $23.29 billion in the reported quarter, missing the Zacks Consensus Estimate of $23.44 billion by 0.6%. The reported figure also declined 1.2% year over year.
Revenues were $94.57 billion in 2016, down 1.6% year over year. However, revenues were almost in line with the Consensus estimate.
Total Backlog
Backlog at the end of the fourth quarter was up to $473.0 billion from $489.3 billion at 2015 end. Reported backlog included $32 billion of net orders during the quarter.
Quarterly Segment Results
Commercial Airplane Segment: The segment saw a 1.5% decline in revenues to $65.07 billion. Operating margin for full year contracted 300 basis points (bps) year over year to 4.8%.
Boeing reported commercial deliveries of 748 planes during 2016, which was down due to lower 737, 747 and 767 deliveries. However the figure is above the company’s guidance of deliveries between 740 and 745 jets for 2016.
In 2016, Boeing delivered 490 units of 737 model airplanes, followed by 137 deliveries of the 787 model. In the year-ago period, the company had delivered 495 and 135 units of the 737 and 787 model airplanes, respectively. Boeing delivered 99 units of the 777 model in 2016, compared with 98 units a year ago. Other deliveries include 13 units of 767s and 9 units of 747s compared with 16 and 18 units, respectively, from a year-ago period.
Boeing won net orders for 668 planes during 2016, valued at $94.0 billion at current list prices. This reflects a decline from the year-ago figure of 768 planes. The order includes 550 orders for the 737, 58 for the 787, 26 for the 767, and 17 each for the 747 and the 777. Its backlog reached over 5,700 worth a total $416 billion.
Boeing Defense, Space & Security (BDS): The segment witnessed an approximate 2.9% year-over-year decrease in 2016 revenues to $29.50 billion. Revenues at two of the three sub-segments – Boeing Military Aircraft (BMA) and Network & Space Systems (N&SS) – recorded year-over-year deterioration of 6.8% and 9.1%, respectively. Global Services & Support (GS&S) witnessed 7.9% year-over-year growth in revenues.
Operating margin for full year contracted 60 bps to 10.2%.
Backlog at BDS was $57 billion, 37% of which comprised orders from international clients.
In the defense and space business, Boeing’s deliveries were 185 in 2016, down from 190 a year ago. Total deliveries consisted of 65 AH-64 Apache helicopters (both new and remanufactured) and 50 Chinook helicopters (new and renewed). The company also delivered 4 C-17 Globemaster IIIs, 1 C-40A, 25 F/A-18s, 18 P-8 models, 15 F-15s, 2 Military Satellites, and 5 Commercial and Civil Satellites.
Boeing Capital Corporation (BCC): Boeing Capital reported quarterly revenues of $298 million, compared with $413 million in the year-ago quarter. The segment’s earnings were $59 million compared with $50 million a year ago.
At the end of the fourth quarter, BCC's portfolio balance was $4.1 billion.
Financial Condition
Boeing exited the fourth quarter with cash and cash equivalents of $8.80 billion and short-term investments of $1,228 million. At year-end 2015, the company had $11.30 billion of cash and cash equivalents and $750 million of short-term investments. Long-term debt was $9.57 billion in the fourth quarter, up from $8.73 billion at 2015 end.
Boeing generated $10.50 billion of operating cash flow in 2016, up 12.0% year over year. Free cash flow was $7.89 billion in 2016 compared with free cash of $6.91 billion a year back.
Guidance
Boeing provided its adjusted or core earnings per share expectation for 2017 in the range of $9.10–$9.30. GAAP earnings are expected in the range of $10.25–$10.45 per share.
The company expects 2017 revenue in the range of $90.5−$92.5 billion.
Commercial Airplanes' 2017 delivery expectations are in the band of 760−765 airplanes with revenues projected in the $62.5−$63.5 billion range. Operating margin is expected in the 9.5–10.0% range.
The company projects 2017 defense revenues in the $28.0–$29.0 billion range with operating margin of approximately 11.5%.
Boeing Capital Corp. expects the aircraft finance portfolio to remain stable. The company anticipates its segment revenue to be approximately $0.3 billion.
Boeing's 2017 R&D forecast has been given at approximately $3.6 billion. Capital expenditures for 2017 are expected to be $2.3 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
At this time, Boeing's stock has a strong Growth Score of 'A', though it is lagging a bit on the momentum front with a 'B'. The stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value and momentum investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Boeing (BA) Up 4.6% Since the Last Earnings Report?
It has been about a month since the last earnings report for Boeing Company (The) (BA - Free Report) . Shares have added about 4.6% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Boeing Beats on Q4 Earnings, Provides 2017 Outlook
Boeing reported adjusted earnings of $2.47 per share for fourth-quarter 2016, beating the Zacks Consensus Estimate of $2.34 by 5.6%. Reported earnings were also up 54.4% from the year-ago figure of $1.60.
The quarterly number reflects solid overall execution of production programs and services.
On a GAAP basis, Boeing reported earnings of $2.59 per share compared with earnings of $1.51 per share in the year-ago quarter.
2016 non-GAAP earnings were $7.24 per share, surpassing the Zacks Consensus Estimate of $7.12 by 1.7%, but decreasing 6.2% year over year. On a GAAP basis, earnings were $7.61 per share, up 2.3% year over year.
Revenues
The company's revenues amounted to $23.29 billion in the reported quarter, missing the Zacks Consensus Estimate of $23.44 billion by 0.6%. The reported figure also declined 1.2% year over year.
Revenues were $94.57 billion in 2016, down 1.6% year over year. However, revenues were almost in line with the Consensus estimate.
Total Backlog
Backlog at the end of the fourth quarter was up to $473.0 billion from $489.3 billion at 2015 end. Reported backlog included $32 billion of net orders during the quarter.
Quarterly Segment Results
Commercial Airplane Segment: The segment saw a 1.5% decline in revenues to $65.07 billion. Operating margin for full year contracted 300 basis points (bps) year over year to 4.8%.
Boeing reported commercial deliveries of 748 planes during 2016, which was down due to lower 737, 747 and 767 deliveries. However the figure is above the company’s guidance of deliveries between 740 and 745 jets for 2016.
In 2016, Boeing delivered 490 units of 737 model airplanes, followed by 137 deliveries of the 787 model. In the year-ago period, the company had delivered 495 and 135 units of the 737 and 787 model airplanes, respectively. Boeing delivered 99 units of the 777 model in 2016, compared with 98 units a year ago. Other deliveries include 13 units of 767s and 9 units of 747s compared with 16 and 18 units, respectively, from a year-ago period.
Boeing won net orders for 668 planes during 2016, valued at $94.0 billion at current list prices. This reflects a decline from the year-ago figure of 768 planes. The order includes 550 orders for the 737, 58 for the 787, 26 for the 767, and 17 each for the 747 and the 777. Its backlog reached over 5,700 worth a total $416 billion.
Boeing Defense, Space & Security (BDS): The segment witnessed an approximate 2.9% year-over-year decrease in 2016 revenues to $29.50 billion. Revenues at two of the three sub-segments – Boeing Military Aircraft (BMA) and Network & Space Systems (N&SS) – recorded year-over-year deterioration of 6.8% and 9.1%, respectively. Global Services & Support (GS&S) witnessed 7.9% year-over-year growth in revenues.
Operating margin for full year contracted 60 bps to 10.2%.
Backlog at BDS was $57 billion, 37% of which comprised orders from international clients.
In the defense and space business, Boeing’s deliveries were 185 in 2016, down from 190 a year ago. Total deliveries consisted of 65 AH-64 Apache helicopters (both new and remanufactured) and 50 Chinook helicopters (new and renewed). The company also delivered 4 C-17 Globemaster IIIs, 1 C-40A, 25 F/A-18s, 18 P-8 models, 15 F-15s, 2 Military Satellites, and 5 Commercial and Civil Satellites.
Boeing Capital Corporation (BCC): Boeing Capital reported quarterly revenues of $298 million, compared with $413 million in the year-ago quarter. The segment’s earnings were $59 million compared with $50 million a year ago.
At the end of the fourth quarter, BCC's portfolio balance was $4.1 billion.
Financial Condition
Boeing exited the fourth quarter with cash and cash equivalents of $8.80 billion and short-term investments of $1,228 million. At year-end 2015, the company had $11.30 billion of cash and cash equivalents and $750 million of short-term investments. Long-term debt was $9.57 billion in the fourth quarter, up from $8.73 billion at 2015 end.
Boeing generated $10.50 billion of operating cash flow in 2016, up 12.0% year over year. Free cash flow was $7.89 billion in 2016 compared with free cash of $6.91 billion a year back.
Guidance
Boeing provided its adjusted or core earnings per share expectation for 2017 in the range of $9.10–$9.30. GAAP earnings are expected in the range of $10.25–$10.45 per share.
The company expects 2017 revenue in the range of $90.5−$92.5 billion.
Commercial Airplanes' 2017 delivery expectations are in the band of 760−765 airplanes with revenues projected in the $62.5−$63.5 billion range. Operating margin is expected in the 9.5–10.0% range.
The company projects 2017 defense revenues in the $28.0–$29.0 billion range with operating margin of approximately 11.5%.
Boeing Capital Corp. expects the aircraft finance portfolio to remain stable. The company anticipates its segment revenue to be approximately $0.3 billion.
Boeing's 2017 R&D forecast has been given at approximately $3.6 billion. Capital expenditures for 2017 are expected to be $2.3 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimate flatlined during the past month. There has been one revision higher for the current quarter compared to one lower.
Boeing Company (The) Price and Consensus
Boeing Company (The) Price and Consensus | Boeing Company (The) Quote
VGM Scores
At this time, Boeing's stock has a strong Growth Score of 'A', though it is lagging a bit on the momentum front with a 'B'. The stock was allocated a grade of 'B' on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value and momentum investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.