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Boeing (BA) Tops Q4 Earnings Estimates, Issues '18 Guidance
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The Boeing Company (BA - Free Report) reported adjusted earnings of $4.80 per share for fourth-quarter 2017, beating the Zacks Consensus Estimate of $2.91 by 64.9%. The quarterly bottom line reflected an improvement of 94% from $2.47 in the year-ago quarter.
The upside was driven by record deliveries, strong performance as well as favorable tax reform of $1.74 per share.
Boeing Company (The) Price, Consensus and EPS Surprise
Excluding the one-time items, aerospace giant reported GAAP earnings of $5.18 per share compared with $2.59 per share in the year-ago quarter.
For 2017, the company posted adjusted earnings of $12.04 per share, beating the Zacks Consensus Estimate of $10.17 by 18.4%. Year over year, the GAAP earnings reflected an improvement of 66%.
Revenues
The company's fourth-quarter revenues amounted to $25.37 billion in the quarter, beating the Zacks Consensus Estimate of $24.83 billion by 2.2%. The top line also improved 9% year over year.
For 2017, the company posted revenues of $93.39 billion, beating the Zacks Consensus Estimate of $92.74 by 0.7%. However, year over year, the top-line figure reflected a decline of 1%.
Total Backlog
Backlog at the end of 2017 was up to $488.1 billion from $473.5 billion at the end of 2016-end. Reported backlog included $40 billion of net orders during 2017.
Quarterly Segment Results
Commercial Airplane Segment: The segment saw an 8% rise in revenues to $15.47 billion, on higher planned delivery volume and mix. Operating margin for the quarter expanded 320 basis points (bps) year over year to 11.5%.
Boeing reported commercial deliveries of 209 planes during the quarter, which was up 13%.
A look at Boeing’s fourth-quarter order details reveals that the company booked 414 net commercial orders (accounting for cancellations). Backlog for this segment was valued at $421 billion.
Boeing Defense, Space & Security (BDS): The segment witnessed an approximate 5% year-over-year increase in fourth-quarter revenues to $5.54 billion, driven by higher weapons deliveries. Operating margin for the quarter expanded 10 bps to 10%.
Backlog at BDS was $50 billion, 40% of which comprised orders from international clients.
Global Services: The segment saw 17% growth in revenues to $4.00 billion, reflecting growth across the company’s portfolio. Operating margin for the quarter contracted 120 basis points (bps) year over year to 15.4%, on account of commercial parts mix.
Boeing Capital Corporation (BCC): Boeing Capital reported quarterly revenues of $73 million compared with $687 million in the year-ago quarter. The segment’s earnings were $27 million compared with $23 million a year ago.
At the end of 2017, BCC's portfolio balance was $3 billion.
Financial Condition
Boeing exited 2017 with cash and cash equivalents of $8.81 billion and short-term and other investments of $1.18 billion. At year-end 2016, the company had $8.80 billion of cash and cash equivalents and $1.23 billion of short-term and other investments. Long-term debt was $9.78 billion at the end of 2017, up from $9.57 billion at 2016-end.
Boeing generated $13.34 billion of operating cash flow at the end of 2017, up 27.1% year over year. Free cash flow was $11.61 billion in 2017 compared with free cash of $7.89 billion at the end of 2016.
Guidance
Boeing’s adjusted or core earnings per share expectation for 2018 are in the range of $13.80-$14.00. GAAP earnings are projected in the range of $15.90-$16.10 per share.
The company currently expects 2018 revenues in the range of $96-$98 billion.
Commercial Airplanes' 2018 delivery expectations are reiterated in the band of 810 to 815 airplanes with revenues projected in the range of $59.5-$60.5 billion. Operating margin is now anticipated to be more than 11%.
The company projects 2018 defense revenues in the $21.5-$22.5 billion range. Operating margin is now anticipated to be above 11%.
Boeing Capital Corp. expects the aircraft finance portfolio to remain stable. The company anticipates its segment revenues to be approximately $0.2 billion.
Boeing's 2018 R&D is forecasted to be approximately $3.7 billion. Capital expenditures for 2018 is expected to be approximately $2.2 billion.
Lockheed Martin Corp. (LMT - Free Report) reported fourth-quarter 2017 adjusted earnings from continuing operations of $4.30 per share, which surpassed the Zacks Consensus Estimate of $4.06 by 5.9%. Its total revenues came in at $15.14 billion, which exceeded the Zacks Consensus Estimate of $14.75 billion by 2.6%.
Rockwell Collins Inc. reported results for first-quarter fiscal 2018 (ended Dec 31, 2017). The company’s adjusted earnings per share of $1.59 beat the Zacks Consensus Estimate of $1.53 by 3.9%. Its total sales were $2,011 million, which beat the Zacks Consensus Estimate of $1,988 million by 1.2%.
Raytheon Company reported fourth-quarter 2017 adjusted earnings from continuing operations of $2.03 per share, beating the Zacks Consensus Estimate of $2.02 by 0.5%. The company’s fourth-quarter revenues of $6,783 million improved 8% year over year.
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Boeing (BA) Tops Q4 Earnings Estimates, Issues '18 Guidance
The Boeing Company (BA - Free Report) reported adjusted earnings of $4.80 per share for fourth-quarter 2017, beating the Zacks Consensus Estimate of $2.91 by 64.9%. The quarterly bottom line reflected an improvement of 94% from $2.47 in the year-ago quarter.
The upside was driven by record deliveries, strong performance as well as favorable tax reform of $1.74 per share.
Boeing Company (The) Price, Consensus and EPS Surprise
Boeing Company (The) Price, Consensus and EPS Surprise | Boeing Company (The) Quote
Excluding the one-time items, aerospace giant reported GAAP earnings of $5.18 per share compared with $2.59 per share in the year-ago quarter.
For 2017, the company posted adjusted earnings of $12.04 per share, beating the Zacks Consensus Estimate of $10.17 by 18.4%. Year over year, the GAAP earnings reflected an improvement of 66%.
Revenues
The company's fourth-quarter revenues amounted to $25.37 billion in the quarter, beating the Zacks Consensus Estimate of $24.83 billion by 2.2%. The top line also improved 9% year over year.
For 2017, the company posted revenues of $93.39 billion, beating the Zacks Consensus Estimate of $92.74 by 0.7%. However, year over year, the top-line figure reflected a decline of 1%.
Total Backlog
Backlog at the end of 2017 was up to $488.1 billion from $473.5 billion at the end of 2016-end. Reported backlog included $40 billion of net orders during 2017.
Quarterly Segment Results
Commercial Airplane Segment: The segment saw an 8% rise in revenues to $15.47 billion, on higher planned delivery volume and mix. Operating margin for the quarter expanded 320 basis points (bps) year over year to 11.5%.
Boeing reported commercial deliveries of 209 planes during the quarter, which was up 13%.
A look at Boeing’s fourth-quarter order details reveals that the company booked 414 net commercial orders (accounting for cancellations). Backlog for this segment was valued at $421 billion.
Boeing Defense, Space & Security (BDS): The segment witnessed an approximate 5% year-over-year increase in fourth-quarter revenues to $5.54 billion, driven by higher weapons deliveries. Operating margin for the quarter expanded 10 bps to 10%.
Backlog at BDS was $50 billion, 40% of which comprised orders from international clients.
Global Services: The segment saw 17% growth in revenues to $4.00 billion, reflecting growth across the company’s portfolio. Operating margin for the quarter contracted 120 basis points (bps) year over year to 15.4%, on account of commercial parts mix.
Boeing Capital Corporation (BCC): Boeing Capital reported quarterly revenues of $73 million compared with $687 million in the year-ago quarter. The segment’s earnings were $27 million compared with $23 million a year ago.
At the end of 2017, BCC's portfolio balance was $3 billion.
Financial Condition
Boeing exited 2017 with cash and cash equivalents of $8.81 billion and short-term and other investments of $1.18 billion. At year-end 2016, the company had $8.80 billion of cash and cash equivalents and $1.23 billion of short-term and other investments. Long-term debt was $9.78 billion at the end of 2017, up from $9.57 billion at 2016-end.
Boeing generated $13.34 billion of operating cash flow at the end of 2017, up 27.1% year over year. Free cash flow was $11.61 billion in 2017 compared with free cash of $7.89 billion at the end of 2016.
Guidance
Boeing’s adjusted or core earnings per share expectation for 2018 are in the range of $13.80-$14.00. GAAP earnings are projected in the range of $15.90-$16.10 per share.
The company currently expects 2018 revenues in the range of $96-$98 billion.
Commercial Airplanes' 2018 delivery expectations are reiterated in the band of 810 to 815 airplanes with revenues projected in the range of $59.5-$60.5 billion. Operating margin is now anticipated to be more than 11%.
The company projects 2018 defense revenues in the $21.5-$22.5 billion range. Operating margin is now anticipated to be above 11%.
Boeing Capital Corp. expects the aircraft finance portfolio to remain stable. The company anticipates its segment revenues to be approximately $0.2 billion.
Boeing's 2018 R&D is forecasted to be approximately $3.7 billion. Capital expenditures for 2018 is expected to be approximately $2.2 billion.
Zacks Rank
Boeing currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Press Release
Lockheed Martin Corp. (LMT - Free Report) reported fourth-quarter 2017 adjusted earnings from continuing operations of $4.30 per share, which surpassed the Zacks Consensus Estimate of $4.06 by 5.9%. Its total revenues came in at $15.14 billion, which exceeded the Zacks Consensus Estimate of $14.75 billion by 2.6%.
Rockwell Collins Inc. reported results for first-quarter fiscal 2018 (ended Dec 31, 2017). The company’s adjusted earnings per share of $1.59 beat the Zacks Consensus Estimate of $1.53 by 3.9%. Its total sales were $2,011 million, which beat the Zacks Consensus Estimate of $1,988 million by 1.2%.
Raytheon Company reported fourth-quarter 2017 adjusted earnings from continuing operations of $2.03 per share, beating the Zacks Consensus Estimate of $2.02 by 0.5%. The company’s fourth-quarter revenues of $6,783 million improved 8% year over year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>