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Will Dismal Defense Deliveries Mar Boeing's (BA) Q2 Earnings?
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The Boeing Company’s (BA - Free Report) Defense, Space & Security segment continues to witness solid orders for its varied product offerings from both Pentagon as well as international allies of the United States. However, a dismal delivery figure for its defense equipment marred this healthy demand scenario. We expect Boeing’s second-quarter 2018 results, scheduled for release on Jul 25, to duly reflect these factors.
Order Flow – A Key Catalyst
In the second quarter, Boeing’s defense business won a number of multi-million dollar contracts and a few billion-dollar contracts. Such solid order flows are likely to boost Boeing’s defense backlog, as well as bolster the defense, space and security segment’s revenues in the soon-to-be reported quarter.
Notably, in the first quarter of 2018, the company’s defense business booked new orders worth $12 billion. Considering the solid contract wins that this segment witnessed in the second quarter, we may expect the upcoming results to reflect notable booking numbers as well.
KC-46 Delivery - A Major Positive
In the first quarter, Boeing’s KC-46 Tanker program completed the required supplemental type certificate fuel onload testing. In April 2018, the company completed all planned supplemental type certificate flight tests for the Tanker program, a significant milestone that management had been aiming for since this aircraft took first flight three years ago.
With management looking to deliver the first 18 tankers this year, we may expect the yet-to-be reported quarter’s results to reveal more updates on this program and perhaps its first delivery to the U.S. Air Force.
On Jul 10, Boeing announced second-quarter 2018 delivery figures that reflected a 64.4% decline in defense shipments compared with the previous year. Notably, the company’s defense deliveries totaled 16 in second-quarter 2018, down from 45 dispatched in the year-ago period. Total deliveries consisted of nine CH-47 Chinook helicopters (new and renewed), four P-8s and three F-15 military aircraft.
What the Zacks Model Unveils
Our proven model does not conclusively show that Boeing is likely to beat earnings in the second quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies in the Aerospace sector that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Raytheon Company is expected to report second-quarter 2018 results on Jul 26. The company has an Earnings ESP of +0.38% and a Zacks Rank #2.
Curtiss-Wright (CW - Free Report) is expected to report second-quarter 2018 results on Jul 25. The company has an Earnings ESP of +0.15% and a Zacks Rank of 2.
Embraer (ERJ - Free Report) is expected to report second-quarter 2018 results on Jul 27. The company has an Earnings ESP of +24.59% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Will Dismal Defense Deliveries Mar Boeing's (BA) Q2 Earnings?
The Boeing Company’s (BA - Free Report) Defense, Space & Security segment continues to witness solid orders for its varied product offerings from both Pentagon as well as international allies of the United States. However, a dismal delivery figure for its defense equipment marred this healthy demand scenario. We expect Boeing’s second-quarter 2018 results, scheduled for release on Jul 25, to duly reflect these factors.
Order Flow – A Key Catalyst
In the second quarter, Boeing’s defense business won a number of multi-million dollar contracts and a few billion-dollar contracts. Such solid order flows are likely to boost Boeing’s defense backlog, as well as bolster the defense, space and security segment’s revenues in the soon-to-be reported quarter.
Notably, in the first quarter of 2018, the company’s defense business booked new orders worth $12 billion. Considering the solid contract wins that this segment witnessed in the second quarter, we may expect the upcoming results to reflect notable booking numbers as well.
KC-46 Delivery - A Major Positive
In the first quarter, Boeing’s KC-46 Tanker program completed the required supplemental type certificate fuel onload testing. In April 2018, the company completed all planned supplemental type certificate flight tests for the Tanker program, a significant milestone that management had been aiming for since this aircraft took first flight three years ago.
With management looking to deliver the first 18 tankers this year, we may expect the yet-to-be reported quarter’s results to reveal more updates on this program and perhaps its first delivery to the U.S. Air Force.
The Boeing Company Price and EPS Surprise
The Boeing Company Price and EPS Surprise | The Boeing Company Quote
Deliveries – A Gloomy Picture
On Jul 10, Boeing announced second-quarter 2018 delivery figures that reflected a 64.4% decline in defense shipments compared with the previous year. Notably, the company’s defense deliveries totaled 16 in second-quarter 2018, down from 45 dispatched in the year-ago period. Total deliveries consisted of nine CH-47 Chinook helicopters (new and renewed), four P-8s and three F-15 military aircraft.
What the Zacks Model Unveils
Our proven model does not conclusively show that Boeing is likely to beat earnings in the second quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Boeing has an Earnings ESP of 0.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Please note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies in the Aerospace sector that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Raytheon Company is expected to report second-quarter 2018 results on Jul 26. The company has an Earnings ESP of +0.38% and a Zacks Rank #2.
Curtiss-Wright (CW - Free Report) is expected to report second-quarter 2018 results on Jul 25. The company has an Earnings ESP of +0.15% and a Zacks Rank of 2.
Embraer (ERJ - Free Report) is expected to report second-quarter 2018 results on Jul 27. The company has an Earnings ESP of +24.59% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>