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Will Higher 737 Deliveries Boost Boeing's (BA) Q4 Earnings?

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Higher volume of commercial deliveries is expected to boost revenue growth of The Boeing Company’s (BA - Free Report) Commercial Airplanes segment in the fourth quarter of 2018. The aerospace giant is slated to release quarterly results on Jan 30, before market open.

Solid Delivery Figures

Boeing announced impressive fourth-quarter 2018 commercial delivery figures on Jan 8. The company delivered 238 airplanes, reflecting an improvement of 13.9% year over year. It also surpassed the Zacks Consensus Estimate of 231. This outperformance can be primarily attributed to higher demand for 737 jets in the soon-to-be-reported quarter. Notably, delivery of the single-aisle 737 jet surged to 173 in the fourth quarter from 148 a year ago.

Meanwhile, shipments of the 777 and 787 Dreamliners totaled 11 and 39 compared with 16 and 36 in the year-ago period, respectively.

In the commercial jet space as airlines continue to report robust profits and strong passenger traffic, Boeing benefited significantly being the largest jet maker. This is quite evident from the company’s improved commercial delivery number, which in turn, is expected to boost the company’s commercial jets’ revenues. Most importantly, improved delivery figures for its flagship commercial fleet of 737, in particular, remains a key catalyst to its commercial business.

In line with this, the Zacks Consensus Estimate for the Commercial Airplanes segment’s fourth-quarter revenues is pegged at $16.7 billion, mirroring a year-over-year improvement of 8.2%. As a result, the consensus mark for this segment’s bottom line also reflects a possible surge of 28%.

The Boeing Company Price and EPS Surprise

The Boeing Company Price and EPS Surprise | The Boeing Company Quote

What the Zacks Model Unveils

Our proven model shows that Boeing is likely to beat earnings in the fourth 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 +0.31% and a Zacks Rank #1. 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.

Other 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:

L3 Technologies is expected to report fourth-quarter 2018 results on Jan 29. The company has an Earnings ESP of +1.19% and a Zacks Rank of 3.

Northrop Grumman (NOC - Free Report) is expected to report fourth-quarter 2018 results on Jan 31. The company has an Earnings ESP of +2.02% and a Zacks Rank #1.

Lockheed Martin (LMT - Free Report) is expected to report fourth-quarter 2018 results on Jan 29. The company has an Earnings ESP of +4.20% and a Zacks Rank of 3.

Zacks' Top 10 Stocks for 2019

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