Can Boeing Deliver on Its New Guidance?

Ally Schmidt - Author

Nov. 20 2020, Updated 3:11 p.m. ET

Fiscal 2015 update

With a stunning nine-month performance behind it, The Boeing Company (BA) updated its guidance for 2015. The company expects revenues to end in the range of $95 billion–$97 billion by the end of 2015 compared to its previous outlook of $94.5 billion–$96.5 billion. This uptick is expected to be driven by higher commercial aircraft deliveries, which is expected to reach 755–760.

Boeing also expects its DSS revenues to remain flat, as it expects any growth in revenues from Boeing Military Aircraft would be offset by the weakness in Network & Space Systems. However, Boeing expects to end DSS margins at 10% for the year.

The company also expects its core earnings per share to be in the range of $7.95–$8.15 for the full year, up from its previous guidance of $7.70–$7.90. This is expected to be followed by higher operating cash flows of about $9.5 billion in contrast to the previously expected $9 billion.

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Boeing also lowered its projected spending on research and development for the year from $3.5 billion to $3.4 billion signaling that its current development programs are running on schedule. It expects its capital expenditures to remain the same as projected earlier but expects its pension expenses to go up to $2.4 billion for the year.

Our analysis

The Boeing Company appears to be confident about its operations and expects to deliver strong growth in its revenues, earnings, and cash flows in the future. It has a large and diverse backlog, and the current weakness in new orders should not hamper its potential for the long term. The company noted it would remain focused on improving productivity and quality, as well as on delivering improved capabilities to meet its customer’s requirements.

Given its focus on accelerating execution and its stellar nine-month performance, we feel the company is on track to achieving its updated guidance.

Boeing is the largest commercial jet manufacturer in the US. Its customers include major airlines like United Airlines (UAL), American Airlines (AAL), Delta Air Lines (DAL), and Alaska Airlines (ALK). Boeing forms ~5% of the Industrial Select Sector SPDR ETF (XLI).

Please refer to Market Realist’s Aerospace and Defense page for ongoing updates.


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