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Solid Defense Deliveries to Aid Boeing's (BA) Q1 Earnings

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The Boeing Company’s (BA - Free Report) Defense, Space & Security (BDS) segment is likely to have recorded solid revenues in first-quarter 2021, courtesy of improved deliveries of the company’s defense products. The quarterly backlog count is also expected to reflect solid figures.  

Boeing’s first-quarter 2021 results are scheduled to be released on Apr 28.

Click here to know how the company’s overall Q1 performance is expected to be.

Steady Order Flow to Aid Backlog

With the U.S. administration spending significantly on the nation’s defense for the past couple of years, Boeing’s defense and space unit has been witnessing solid order flow from the Pentagon, NASA and Congress for its varied products. This, in turn, has been consistently boosting BDS unit’s backlogs.

Amid the uncertainties caused by the COVID-19 pandemic, the defense market has been relatively stable. Boeing has been witnessing solid, global demand for its major combat programs, which translated into an overall order value of $5 billion for the BDS unit in the fourth quarter. We expect the upcoming results to duly reflect a similar order count in terms of solid backlog figure for the BDS unit.

The Boeing Company Price and EPS Surprise

The Boeing Company Price and EPS Surprise

The Boeing Company price-eps-surprise | The Boeing Company Quote

Solid Deliveries Boost Q1 Performance

Boeing’s first-quarter 2021 defense delivery figures reflected an improvement of 7.7% from the year-ago period.

In the quarter, its defense deliveries totaled 42, up from 39 in the year-ago period. Such impressive delivery figures are expected to have boosted the defense segment’s revenues in the soon-to-be-reported quarter.

Notably, the Zacks Consensus Estimate for the company’s defense unit revenues, pegged at $6,163 million indicates an increase of 2% from the year-ago quarter’s reported figure.

Earnings Prospects

COVID-induced business disruptions and production inefficiencies have been hampering the BDS unit’s operating margin. However, we expect to witness a reversal of this trend in the first quarter, with gradual economic recovery boosting delivery activities.

Such an improving operating margin prospect along with solid revenue growth expectations make us optimistic about BDS unit’s earnings performance in the soon-to-be-reported quarter.

Notably, the Zacks Consensus Estimate for the company’s defense unit earnings, pegged at $985 million, indicates a significant improvement from loss incurred in the year-ago quarter.

What the Zacks Model Unveils

According to the Zacks model, the combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better — increases the odds of an earnings surprise.

Boeing has an Earnings ESP of +4.65% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are some other defense companies you may want to consider as these also have the right combination of elements to post an earnings beat in their upcoming releases:

Moog Inc (MOG.A - Free Report) has an Earnings ESP of +8.41% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Triumph Group (TGI - Free Report) has an Earnings ESP of +9.80% and a Zacks Rank #3.

A Recent Defense Release

Lockheed Martin (LMT - Free Report) reported first-quarter 2021 earnings of $6.56 per share, which surpassed the Zacks Consensus Estimate of $6.32 by 3.8%. The bottom line also improved 7.9% from the year-ago quarter’s $6.08.

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