The Boeing Company
) raised its quarterly dividend by 10% to 48.5 cents per share
from the previous payout of 44 cents per share. The dividend is
payable on March 8, 2013, to shareholders of record as of
February 15, 2013. The hike raised Boeing's annualized dividend
per share to $1.94 versus the pre-existing $1.76.
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Boeing also announced the resumption of its stock repurchase
program with repurchases expected to total between $1.5 billion
and $2.0 billion in 2013. The company plans to begin repurchasing
shares in the open market following its fourth-quarter earnings
announcement in late January 2013. The repurchase program is
expected to use the remaining $3.6 billion previously authorized
by the Boeing board of directors in October 2007.
Boeing's strong balance sheet and cash flows provide financial
flexibility in matters of incremental dividend, share repurchases
and earnings accretive acquisitions. The company had a strong
balance sheet with a stable long-term debt-to-capitalization of
62.1% at the end of the first nine months of 2012. Boeing's
diversified revenue stream provides a strong earnings stream
leading to strong cash flows. The company generated approximately
$3.3 billion of cash flows from operating activities in the first
nine months of 2012. The company ended the first nine months of
2012 with cash and cash equivalents of $6.6 billion and
short-term investments of $4.6 billion. Long-term debt decreased
to $9.0 billion at the end of the first nine months of 2012 from
$10.0 billion at the end of fiscal 2011.
Boeing enjoys a unique position as the largest aircraft
manufacturer in the world in terms of revenues, orders and
deliveries, and is also one of the largest aerospace and defense
contractors. Besides, its revenues are spread across more than 90
countries around the globe.
Boeing taking into account its performance in the first nine
months of 2012, raised its full year 2012 earnings per share
guidance to a range of $4.80-$4.95 from its earlier range of
$4.40-$4.60. The company also raised its revenue guidance for
2012 to the range of $80.5 billion to $82 billion versus the
earlier range of $79.5 billion to $81.5 billion.
The company expects its Commercial Airplanes' 2012 deliveries to
come between 585 and 600 airplanes, which are already sold out.
This includes an expected 70 to 85 787 and 747-8 deliveries.
Commercial Airplanes' 2012 revenue is expected to be between
$47.5 billion and $49.5 billion with operating margin around
In the defense space, the company expects defense revenue for
2012 to be between $32.5 billion and $33.0 billion versus its
earlier range of $31.5 billion and $32.0 billion with operating
margin greater than 9%. Boeing Capital Corporation expects that
its aircraft finance portfolio will continue to decline in 2012.
Boeing currently retains a Zacks #3 Rank, which translates into a
short-term Hold rating. Considering the fundamentals, we are
maintaining our Neutral recommendation on the stock. This is in
sync with other aerospace and defense behemoths,
General Dynamics Corporation
Lockheed Martin Corporation