Boeing Earnings: BA Stock Takes Off After Q4 EPS, Revenue Beat

Boeing ()

Boeing ()

Shares of Boeing (BA) have taken off in the pre-market session Wednesday, rising almost 2% to a session high of $163 after the world's biggest planemaker reported fourth quarter fiscal 2016 earnings results that beat Wall Street estimates on both the top and bottom lines.

Boeing has resorted to cost cutting in recent quarters to offset declining revenue. But with the company forecasting higher deliveries for fiscal 2017, combined with rising free cash flow, Boeing stock — currently at 52-week highs — might not land for some time. And when factoring the company’s 3.6% annual dividend yield and president Trump’s promise to increase defense spending, Boeing’s attractive combination of income and value could appeal to patient investors with long-term horizons. Let’s go through the numbers.

For the quarter that ended December, the Chicago, IL-based defense company reported a net income of $1.63 billion, or $2.59 per share, compares to $1.03 billion, or $1.51 per share, in the same period a year ago. On an adjusted basis, when taking out one-time gains and cost, earnings were $2.47 per share, which was enough for a 12-cent beat. Fourth quarter revenue declined 1.2% year over year to $23.29 billion, down from $23.57 billion a year ago, but beating consensus of $23.19 billion.

"We led the industry in commercial airplane deliveries for the fifth consecutive year, achieved healthy sales in our defense, space and services segments, and produced record operating cash flow, which fueled investment in innovation and our people and generated significant returns to shareholders,” CEO Dennis Muilenburg said in a statement.

After a solid 2016, during which revenues reached almost $95 billion, Boeing still has a strong backlog of $473 billion with more than 5,700 commercial airplane orders it can still rely on. And that robust order total was reflected in its outlook. Boeing expects 2017 core earnings, which exclude some pension and other costs, to be in the range of $9.10 to $9.30 per share on revenue of $90.5 billion to $92.5 billion.

In terms of deliveries, the company is targeting a range of 760 to 765 commercial planes in 2017, up from a 748 deliveries in 2016, while operating cash flow is expected to be to $10.75 billion in 2017, compared to 2016 reported cash flow of $10.50 billion. Last year, the company bought back 55.1 million shares, spending $7.0 billion.

Boeing shares have risen 3% year to date, besting the 1.4% risen in the S&P 500 Index. The stock has risen almost 30% over the past year.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Richard Saintvilus

After having spent 20 years in the IT industry serving in various roles from system administration to network engineer, Richard Saintvilus became a finance writer, covering the investor's view on the premise that everyone deserves a level playing field. His background as an engineer with strong analytical skills helps him provide actionable insights to investors. Saintvilus is a Warren Buffett disciple who bases his investment decisions on the quality of a company's management, its growth prospects, return on equity and other metrics, including price-to-earnings ratios. He employs conservative strategies to increase capital, while keeping a watchful eye on macro-economic events to mitigate downside risk. Saintvilus' work has been featured on CNBC, Yahoo! Finance, MSN Money, Forbes, Motley Fool and numerous other outlets. You can follow him on Twitter at @Richard_STv.

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