The Boeing Company
) was awarded a $10 million cost plus fixed fee contract to provide
systems studies, analyses integrations and demonstrations with the
unmanned aerial system termed dominator and common smart
sub-munition to assess the capabilities of the system in meeting
Air Force Research Laboratory requirements. The location of
the performance is St. Louis, Montana. Work is expected to be
completed by January 25, 2017. The contracting activity is
AFRL/RWK, Eglin Air Force Base, Florida.
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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.
Looking forward, Boeing in its 2012 Current Market Outlook
estimates a $4.5 trillion market for 34,000 new commercial
airplanes over the next 20 years. Boeing's projection of growth is
based on the strength of the commercial aviation market, recovery
witnessed in world economies and strong demand for fleet addition
and replacement. Airline traffic is forecast to grow at a 5% annual
rate over the next two decades, with cargo traffic projected to
grow at an annual rate of 5.2%.
Inspired by such strong projections, Boeing recently raised its
full-year 2012 earnings per share guidance to a range of
$4.40-$4.60 versus its earlier guidance range of $4.15-$4.35. The
company's revenue guidance for 2012 is in the range of $79.5-$81.5
billion versus the earlier range of $78.0-$80.0 billion. Commercial
Airplanes' 2012 deliveries are expected to be 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 hovering around 9.0%.
In the defense space, however, the threat of cutbacks will loom
over the company going forward. Overall, Boeing expects defense
revenue for 2012 to be between $31.5 billion and $32.0 billion with
operating margin greater than 9%.
The company is expected to release its third-quarter 2012 results
on October 24, 2012. The Zacks Consensus Estimates for
third-quarter 2012 and fiscal 2012 are currently pegged at $1.12
per share and $4.71 per share, respectively.
Boeing currently retains a Zacks #2 Rank, which translates into a
short-term Buy 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