For Immediate Release
Chicago, IL - January 26, 2012 - Zacks.com announces the list of
stocks featured in the Analyst Blog. Every day the Zacks Equity
Research analysts discuss the latest news and events impacting
stocks and the financial markets. Stocks recently featured in the
The Boeing Company
Lockheed Martin Corporation
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Here are highlights from Wednesday's Analyst
Boeing Tops on Higher Deliveries
In the fourth quarter of 2011,
The Boeing Company
) soaring on higher deliveries of commercial airplanes posted
strong numbers. In the reported quarter, the company posted
operating EPS (excluding special items) of $1.32, beating both the
Zacks Consensus Estimate of $1.02 and year-ago EPS of $1.06. The
company's strong numbers came from higher commercial planes
deliveries which more than offset a tepid quarter for defense.
On a reported basis, Boeing reported quarterly EPS of $1.84 per
share versus $1.56 in the year-ago quarter. The 52 cents difference
between reported and operating earnings, during the reported
quarter, was owing to the effects of a favorable tax
Fiscal 2011 operating EPS (excluding special items) came in at
$4.81, above the Zacks Consensus Estimate of $3.81 and fiscal 2010
earnings of $4.16. On a reported basis, earnings came in at $5.34
in fiscal 2011 versus $4.45 in fiscal 2010.
On the revenue front, higher airplane deliveries pulled up the
quarterly revenue year-over-year by 18% to $19.6 billion, above the
Zacks Consensus Estimate of $19.3 billion. Fiscal 2011 revenue rose
7% to $68.7 billion, moderately above the Zacks Consensus Estimate
of $68.5 billion.
Commercial Airplane segment
Boeing's Commercial Airplane segment in the reported quarter saw
a 10% rise in deliveries to 128 units. As a result, Commercial
Airplanes revenue increased by 31% to $10.7 billion on higher
delivery volume and mix. In the reported quarter the company
delivered 9 747 series and 2 787 series airplanes versus zero
deliveries in the year-ago period. The company also delivered a
higher number of 767 and 777 series airplanes (6 & 20) versus
the year-ago period (3 & 18). The upsurge was partially offset
by a lower number of 737 deliveries (91 versus 95) year over
Operating margin rose 150 basis points to 9.2%, reflecting lower
Research & Development expenditure. This was partially offset
by the dilutive impact of initial 787 and 747-8 deliveries and
higher period costs.
Commercial Airplanes booked 379 net orders during the reported
quarter. Backlog at fiscal 2011-end remains strong with more
than 3,700 airplanes valued at a record $296 billion.
Boeing Defense, Space & Security
Boeing Defense, Space & Security segment witnessed a 4% rise
in its quarterly revenue to $8.5 billion. Of these sub-segments
Boeing Military Aircraft (
) and Global Services & Support (GS&S) witnessed a top line
climb of 9% and 21%, respectively. Only the sub-segment, Network
& Space Systems (N&SS) recorded a 19% fall in revenues.
Quarterly operating margin rose by 20 basis points to 10.2%.
This was due to strong execution across various BMA programs.
However, this was partially offset by lower margins at the N&SS
and GS&S units. In the N&SS sub-segment, margin fell owing
to higher R&D. Similarly GS&S margins were affected
by the downcast in current defense contracting
Backlog at Defense, Space & Security was $60.0 billion.
Boeing Capital Corporation (BCC)
Boeing Capital Corporation reported quarterly revenues of $116
million compared with $145 million in the year-ago quarter. The
segment digested a loss of $8 million compared to earnings of $6
million in the year-ago period. At fiscal 2011-end, BCC's portfolio
balance declined to $4.3 billion, flat versus the beginning of the
Boeing ended fiscal 2011 with cash and cash equivalents of $10.0
billion and short-term investments of $1.2 billion. At fiscal-end
2010, the company had $5.4 billion in cash and cash equivalents and
$5.2 billion of short-term investments. The company generated more
than $4.0 billion of cash from operating activities in fiscal 2011,
compared with approximately $3.0 billion generated in fiscal 2010.
Long-term debt decreased to $10.0 billion at the end of the
reported fiscal from $11.5 billion at the end of fiscal 2010.
Boeing has a unique position as the largest aircraft
manufacturer in the world in terms of revenues, orders and
deliveries, and is one of the largest aerospace and defense
contractors in the world. Besides, its revenues are spread across
more than 90 countries around the globe.
Boeing expects its fiscal 2012 GAAP earnings to be in the range
of $4.05-$4.25 per share, and adjusted earnings of $5.06-5.26 per
share. Revenue for 2012 is expected to be between $78 billion and
$80 billion. Commercial Airplanes' 2012 deliveries are expected to
be between 585 and 600 airplanes and 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 margins between 8.5% and 9%.
In the defense space, the company also secured big contracts
like the sale of 84 new F-15SA aircraft and upgrades to an
additional 70 F-15Ss to Saudi Arabia; P-8A low rate initial
production lot II production award from the U.S. Navy; development
and sustainment contract for Ground-based Midcourse Defense from
the U.S. Missile Defense Agency; and the C-17 Globemaster III
Integrated Sustainment Program from the U.S. Air Force. However,
the threat of defense cutbacks will loom over the company going
forward. Overall, the company expects defense revenue for 2012 to
be between $30.0 billion and $30.5 billion with operating margin
greater than 9%.
Boeing Capital Corporation expects that its aircraft finance
portfolio will continue to decline in 2012, as new aircraft
financing of less than $0.5 billion is expected to be lower than
the normal portfolio runoff through customer payments and
depreciation. BCC's debt-to-equity ratio is expected to
return to 5.0-to-1 in the first quarter of 2012 due to the
repayment of maturing debt.
Boeing's 2012 R&D forecast is between $3.3 billion and $3.5
billion. Capital expenditures for 2012 are expected to be
approximately $2.0 billion.
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. A clearer picture
will emerge tomorrow when the big daddy of defense
Lockheed Martin Corporation
) comes out with 2011 earnings.
Abbott Beats, Guides In-Line
) reported fourth quarter earnings of $1.45 per share, a penny
above the Zacks Consensus Estimate and at the higher end of the
guidance range provided by the company. Fourth quarter earnings
increased 11.5% from the year-earlier period. Including one-time
items, fourth quarter earnings increased 10.9% to $1.02 per
Fourth quarter revenues increased 4.1% to $10.4 billion, just
shy of the Zacks Consensus Estimate of $10.6 billion.
Full year earnings came in at $4.66 per share, a penny above the
Zacks Consensus Estimate and 11.8% above the year-ago earnings.
Full year earnings came in at the higher end of the guidance range
of $4.64 - $4.66 per share. 2011 revenues increased 10.5% to $38.9
billion, just shy of the Zacks Consensus Estimate of $39
In-Line Outlook for 2012
Along with releasing fourth quarter results, Abbott Labs
provided guidance for 2012. The company expects 2012 earnings in
the range of $4.95 to $5.05 per share. Guidance was in-line with
expectations with the Zacks Consensus Estimate, currently standing
at $5.04 per share. The company intends to resume share buybacks in
Abbott Labs provided an update on its intention to split into
two separate publicly traded companies: the company said that it
expects to complete the separation by year end. While one company
will deal in diversified medical products, the other will focus on
Abbott Labs also provided an update on its pipeline. The company
currently has 20 candidates in phase II/phase III development. The
acquisition of Facet Biotech has helped strengthen Abbott Labs'
early- and mid-stage oncology portfolio. The company moved
elotuzumab, which is being developed with
), into phase III studies for multiple myeloma.
Abbott Labs is also working on strengthening its neuroscience
portfolio and has several candidates in different stages of
development for the treatment of diseases like schizophrenia, pain,
Parkinson's Alzheimer's and multiple sclerosis. Abbott Labs, along
), moved daclizumab into a phase III study for the treatment of
relapsing-remitting multiple sclerosis (
). Abbott Labs is also working on an intestinal gel for advanced
Parkinson's disease - the company expects to file for US approval
Another promising pipeline candidate is bardoxolone, which is in
phase III studies for chronic kidney disease.
Neutral on Abbott Labs
We currently have a Neutral recommendation on Abbott Labs, which
carries a Zacks #3 Rank (short-term Hold rating). We believe Abbott
Labs' strong business segments, contributions from recent
acquisitions and impressive late-stage pipeline will help fortify
long-term earnings growth. Humira should continue to be a strong
growth driver in the years to come.
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