Analysts’ 4Q17 revenue estimates

Analysts polled by Thomson Reuters estimate that Boeing (BA) will achieve revenue of $24.7 billion in 4Q17. As per its own guidance, Boeing is anticipating 4Q17 revenue in the range of $22.5 billion–$24.5 billion. This means that while analysts expect YoY (year-over-year) revenue growth of 6% in 4Q17, the company expects it to be ~1%.

In 4Q16, BA’s revenue was $23.3 billion. BA’s forecasts appear to be far more conservative than those of Wall Street analysts.

Will Boeing Meet Analysts’ Revenue Estimates in 4Q17?

For 2017, analysts are expecting Boeing to attain revenue of $92.6 billion. Again, this is above the company’s guidance of $90.5 billion–$92.5 billion in revenue for 2017. However, BA’s own 2017 estimates are 3.4% lower than its 2016 revenue of $94.6 billion. For 2018, analysts expect Boeing to report revenue of $93.4 billion, a rise of 0.9% compared to their 2017 estimate of $92.6 billion.

Boeing’s segmental breakup

For 2017, Boeing’s Commercial Airplanes segment is expected to contribute $55.5 billion–$56.5 billion in revenue, whereas the Defense division is expected to contribute $20.5 billion–$21.5 billion in revenue. The Global Services segment is expected to contribute $14.0 billion–$14.5 billion in revenue in the year.

The global aviation (IYT) passenger and cargo market looks promising in 2018. The IATA (International Air Transport Association) expects worldwide passenger traffic RPK (revenue passenger kilometers) to grow 6.0%. The global aviation cargo business is expected to rise 4.5% in 2018. The IATA believes that North American aviation market conditions will remain strong this year.

Taking all these things into consideration, Boeing anticipates raising the BA 787 production rate from 12 airplanes per month to 14 per month in 2019. Meanwhile, BA has initiated building the first complete 777X wing for structural testing. During 3Q17, the company’s Defense, Space, and Security segment received orders worth $6.0 billion. The strong order base should boost the segment’s revenue growth in the coming quarters. This should provide an impetus to Boeing’s revenue growth in the medium term.

Peer group revenue estimates for 2018

Among Boeing’s peers, analysts expect Lockheed Martin (LMT) to report 1.1% higher revenue of $51.2 billion in 2018 on a YoY basis. General Dynamics (GD) is expected to achieve revenue of $32.6 billion, up 5.1% from its level in 2017.

Raytheon Company (RTN), which competes with Boeing in the Defense segment, is expected to attain revenue of $26.6 billion in 2018, representing an expected 5% rise compared to last year. Another major peer of Boeing’s, Northrop Grumman (NOC), is expected to report revenue of $26.9 billion in 2018, a 5.5% rise YoY.

In the next article, we’ll look at analysts’ estimates for Boeing’s operating margins in 4Q17 and beyond.

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