The Boeing Company ( BA ) raised its quarterly dividend by 5% to $0.44 per share from $0.42 per share. The dividend is payable on March 2, 2012, to shareholders of record as of February 10, 2012. The hike raised Boeing's annualized dividend per share to $1.76 versus the pre-existing $1.68.
Earlier, Boeing ended the third quarter of 2011 with cash and cash equivalents of $5.95 billion and short-term investments of $3.23 billion. The company generated $1.09 billion of cash from operating activities in the first nine months of 2011 versus $1.84 billion in the first nine months of 2010. Long-term debt decreased to $10.78 billion at the end of the third quarter of 2011 from $11.47 billion at the end of fiscal 2010.
Boeing's strong balance sheet and cash flows provide financial flexibility in matters of incremental dividend, ongoing share repurchases and earnings accretive acquisitions. Boeing's diversified revenue stream provides a strong earnings source leading to healthy cash flows.
Boeing enjoys a coveted position as the largest aircraft manufacturer in the world in terms of revenues, orders and deliveries. Besides, it is one of the leading global aerospace and defense contractors. Also, its revenues are spread across more than 90 countries.
Strong performance of the commercial airplanes business and stable core operations allowed Boeing to register a solid third quarter 2011. The company's earnings surpassed both the year-ago figure and the Zacks Consensus Estimate.
Boeing expects its fiscal 2011 revenue to be in the range of $68 billion to $70 billion. However, the company recently raised its earnings per share guidance for fiscal 2011 to $4.30 - $4.40 from the earlier band of $3.90 - $4.10 buoyed by strong performance across its core businesses.
The guidance incorporates the delivery initiation of revenue boosters like the 787 Dreamliner and 747-8 series, which began in the third quarter. However, the company revised the Commercial Airplanes' deliveries guidance for fiscal 2011. Deliveries for fiscal 2011 are now expected to be approximately 480, down from the earlier range of 485 - 495. The reduction was due to lower planned deliveries on development programs (especially 787 and 747-8 units).
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 like General Dynamics Corporation ( GD ) and Lockheed Martin Corporation ( LMT ).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.