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Boeing Surpassed Analysts’ 4Q17 Estimates, Stock Rose 5%

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Boeing’s 4Q17 earnings

On January 31, 2018, Boeing (BA) announced its 4Q17 earnings. The world’s largest commercial aircraft manufacturer surpassed the Thomson Reuters-surveyed analysts’ adjusted earnings estimates by ~5.9%. 

While analysts estimated BA’s adjusted earnings to reach $2.89 per share, the company’s adjusted earnings were $3.06 per share in 4Q17. On a YoY (year-over-year) basis, Boeing’s 4Q17 adjusted earnings per share were ~24.0% higher compared to $2.47 in 4Q16.

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Boeing stock price’s reaction

On January 30, 2018, a day before the earnings announcement, Boeing (BA) stock closed at $337.71. On January 31, the company declared its record 4Q17 earnings after the markets opened. Boeing’s disclosure of its 4Q17 results impressed the market and sent its stock soaring nearly 5.0% to close at $354.37.

A look at the company’s stock price in the last year reveals that BA is currently hovering near its intraday 52-week high of $360.90 noted on January 31, 2018. The company anticipates record aircraft deliveries in 2018, which could reverse its revenue decline witnessed in the last two years.

Since the beginning of 2018, Boeing stock returned 20.2% to its investors, which is the highest among its peer group. Let’s see how its peers have delivered since January 1, 2018:

  • Lockheed Martin (LMT): 10.5%
  • Northrop Grumman (NOC): 10.9%
  • Raytheon Company (RTN): 11.2%
  • Textron (TXT): 3.7%
  • Hexcel (HXL): 10.5%
  • General Electric (GE): -7.3%

The SPY SPDR S&P 500 ETF (SPY), a broad market indicator, has returned 5.6% since January 1, 2018.

Boeing’s 2018 outlook

On the company’s 4Q17 earnings call, Gregory Smith, Boeing’s CFO, noted, “Core earnings per share guidance for 2018 is set to be between $13.80 and $14 per share on higher volume, improved productivity and affordability and the impact of tax reform. 

“Operating cash flow for 2018 is forecasted to increase by $1.7 billion to be approximately $15 billion, largely driven by the following: improving 787 cash generation, higher 737 productions and improved Tanker profile, partially offset by the cash impact from the 777 investments and planned 777 lower volume.”

In this post-earnings series on Boeing’s 4Q17 results, we’ll look at its segmental revenues and margins. We’ll also see how analysts view the company and its peers after the 4Q17 earnings releases.

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