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Strong Commercial Airplane Shipments to Drive Boeing’s Q4 Revenue

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Commercial airplane deliveries

Wall Street analysts expect the Boeing Company (BA) to report revenue of $26.95 billion, 6.2% higher than its revenue of $25.15 billion in the previous year’s quarter. The majority of its top line growth is likely to be driven by the strong performance of its Commercial Airplanes segment.

Analysts expect Boeing’s Commercial Airplanes segment’s sales to rise 9.7% YoY (year-over-year) to $16.76 billion primarily due to a higher number of aircraft deliveries. According to the company’s latest update on aircraft orders and shipments, Boeing has shipped 238 jets, ~14 more than it shipped in the fourth quarter of 2017.

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The number of jets the company delivered in the fourth quarter of 2018 was the highest among all of the previous quarters in the year. In the first, second, and third quarters, the company shipped 184, 194, and 190 jets, respectively. Boeing’s famous 737 airplanes were the most significant contributors to its fourth-quarter deliveries. The company dispatched 173 of these planes, which accounted for ~73% of its total shipments.

However, softness in the Defense and Space segment’s deliveries is likely to slightly affect Boeing’s fourth-quarter top line growth. In the fourth quarter, the company’s shipments of Defense and Space products fell 25.6% YoY to 32 from 43. Despite this, analysts expect the improved pricing of its products to more than offset its volume decline. Analysts’ consensus estimate for Boeing’s revenue is pegged at $5.65 billion, a 2% rise YoY.

Full-year expectations

For 2018, analysts anticipate Boeing’s revenue to rise 6.8% YoY to $99.8 billion. Its Commercial Airplanes segment’s revenue is likely to rise 5.7% YoY to $59.98 billion. Boeing made record deliveries in 2018. Last year, it supplied a total of 806 aircraft and surpassed its 2017 record of 763 shipments. Last year also marked the company’s 11th straight year of annual production growth.

Of the total, ~72% (or 580) of Boeing’s airplane deliveries in 2018 were the 737 model. During the year, Boeing’s 737 models were delivered to major US air carriers (JETS) such as American Airlines (AAL), Delta Air Lines (DAL), Southwest Airlines (LUV), and United Continental (UAL).

Boeing’s Defense and Space shipments fell massively to 98 in 2018 from 174 in 2017. This quarter, Wall Street expects the segment to report a 7.7% rise in revenue to $22.67 billion.

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