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The Boeing Company (BA - Analyst Report) signed a teaming agreement with Sikorsky Aircraft Corporation, a subsidiary of United Technologies Corporation (UTX - Analyst Report). The agreement stipulates submission of a joint proposal in response to the U.S. Army Aviation Applied Technology Directorate solicitation for the Army's Joint Multi-Role (JMR) Technology Demonstrator (TD) Phase 1 program.
The JMR TD supports the Department of Defense's Future Vertical Lift program to deliver the next generation of vertical lift aircraft with greater performance, reliability and affordability.
Boeing enjoys a unique position as the largest aircraft manufacturer in the world in terms of revenues, orders and deliveries, and is also one of the largest aerospace and defense contractors. Besides, its revenues are spread across more than 90 countries around the globe.
Boeing’s strong balance sheet and cash flows provide financial flexibility in matters of incremental dividend, share repurchases and earnings accretive acquisitions. The company had a strong balance sheet with a stable long-term debt-to-capitalization of 62.1% at the end of the first nine months of 2012. Boeing’s diversified revenue stream provides stable earnings leading to strong cash flows. The company generated approximately $3.3 billion of cash flows from operating activities in the first nine months of 2012. The company ended the first nine months of 2012 with cash and cash equivalents of $6.6 billion and short-term investments of $4.6 billion. Long-term debt decreased to $9.0 billion at the end of the first nine months of 2012 from $10.0 billion at the end of fiscal 2011.
Boeing taking into account its performance in the first nine months of 2012, raised its full year 2012 earnings per share guidance to a range of $4.80–$4.95 from its earlier range of $4.40–$4.60. The company also raised its revenue guidance for 2012 to the range of $80.5 billion to $82 billion versus the earlier range of $79.5 billion to $81.5 billion.
The company expects its Commercial Airplanes' 2012 deliveries to come between 585 and 600 airplanes, which 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 margin around 9.0%.
In the defense space, the company expects defense revenue for 2012 to be between $32.5 billion and $33.0 billion versus its earlier range of $31.5 billion and $32.0 billion with operating margin greater than 9%. Boeing Capital Corporation expects that its aircraft finance portfolio will continue to decline in 2012.
Boeing currently retains a Zacks Rank #3, which translates into a short-term Hold rating. This is in sync with other aerospace and defense behemoths, General Dynamics Corporation (GD - Analyst Report) and Lockheed Martin Corporation (LMT - Analyst Report).
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