Boeing Smashes Q4 Estimates, Issues Upbeat FY18 Outlook

Boeing Smashes Q4 Estimates, Issues Upbeat FY18 Outlook
February 1, 2018

Aircraft manufacturer Boeing Company (NYSE: BA) reported fiscal 2017 fourth-quarter results that smashed analysts’ estimates. The company posted a record operating earnings of $3 billion and operating cash flow of $2.9 billion on robust performance. Further, Boeing issued an upbeat revenue guidance for fiscal 2018. Following the results, the stock gained 4.93% or $16.66 to close at $354.37. We anticipate the stock to remain bullish in the short-term.

The world’s largest aircraft manufacturer reported fourth-quarter 2017 revenues of $25.37 billion, up 9% from $23.29 billion in the corresponding period last year. Analysts polled by Thomson Reuters had anticipated revenues of $24.69 billion in the recent quarter.

Net earnings in 4Q17 were $3.132 billion, or $5.18 per share, up 92% from $1.631 billion, or $2.59 per share in 4Q16. Excluding charges and gains from the changes made to the tax law, the adjusted earnings were $2.68 billion, or $4.80 per share, compared with $2.064 billion, or $2.47 per share in the year-ago period. The Wall Street analysts had expected earnings of $2.89 per share in Q4 2017.

The Commercial Airplane segment recorded 8% y-o-y rise in revenues to $15.47 billion. Boeing delivered 209 planes during the quarter, an increase of 13% from last year.

The Defense, Space & Security (BDS) segment posted Q4 revenues of $5.54 billion, up 5% from last year. The Global Services segment recorded revenues of $4 billion, an increase of 17% from last year. Boeing Capital Corporation reported revenues of $73 million, compared with $87 million in the prior-year’s similar quarter.

Boeing delivered 763 planes in 2017, exceeding the previous high of 762 planes recorded in 2015. Boeing received 912 jet orders in the quarter, taking the backlog to an all time high of 5,864 commercial aircraft orders. The value of backlog at the end of 2017 was $488.10 billion, up from $473.50 billion at the end of 2016.

The company also provided an upbeat forecast for 2018. Boeing said it anticipates to deliver between 810 and 815 commercial aircrafts this year. Last year, Boeing delivered 763 jets. The FY18 revenue expectation is in the range of $96 billion to $98 billion. Core earnings per share for FY18 is expected to be between $13.80 and $14 per share. Likewise, GAAP earnings are anticipated in the range of $15.90 to $16.10 per share.

The company ended fiscal 2017 with cash and cash equivalents of $8.81 billion and short-term investments of $1.18 billion.
Commenting on the results, Boeing CEO Dennis Muilenburg said “Our team remains focused on winning through innovation, driving growth and productivity and extending our position as the world’s leading aerospace company.”
Thus, robust earnings and upbeat FY18 outlook is expected to keep the stock bullish in the short-term.

The stock opened with a positive gap and moved up higher yesterday. The stock also recorded a new yearly high of $360.97. The Williams’ Percentage Indicator continues to remain in the bullish zone. Thus, we forecast the stock to move further upwards in the short-term.

Boeing - Technical Analysis - February 2018

A call option is best suited to profit from the current rally in the stock price. We may invest in a call option contract as long as the stock trades near $355 in the NYSE. Further, the option should remain active for a period of one week.

Disclaimer: The trading analysis offered here is our opinion. It is not provided as trading advice, merely an indication of our trading plan. We cannot guarantee success and we encourage traders to incorporate a strong money management strategy to limit losses. Please use this article as part of your own research before formulating strategies prior to trading.

Andrew Wright

Prior to founding in 2014, Andrew worked as a proprietary trader, then as a market maker. As a market maker, he traded options in over 100 stocks, he then began trading currency pairs in 2013. Andrew still actively trades both, and prides himself on educating and informing traders on the benefits of both Binary Options and Forex.

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