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Boeing (BA) Down 6.5% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Boeing (BA - Free Report) . Shares have lost about 6.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Boeing due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Boeing reported adjusted earnings of 40 cents per share for second-quarter 2021 in contrast to the Zacks Consensus Estimate of a loss of 65 cents. The bottom line also improved significantly from the year-ago quarter’s loss of $4.79.
Including one-time items, the company reported GAAP earnings of $1 per share against a loss of $4.20 incurred in the second quarter of 2020.
The year-over-year bottom line improvement can be attributed to higher commercial volume and lower commercial airplanes period costs.
Revenues
In the quarter under review, Boeing’s revenues amounted to $16,998 million, which missed the Zacks Consensus Estimate of $17,027 million by 0.2%. The top line however improved 44% from the year-ago quarter’s figure of $11,807 million.
This improvement in top line was driven by higher commercial airplanes and services volume.
Total Backlog
Backlog at the end of second-quarter 2021 was $363.5 billion, slightly down from $364 billion at the end of first-quarter 2021.
Segmental Performances
Commercial Airplane: Revenues at this segment improved a massive 268% to $4.02 billion due to higher commercial jet deliveries. The segment incurred operating loss of $472 million compared with loss of $2.76 billion in the year-ago quarter.
Boeing delivered 79 commercial planes during the quarter under review, up 295% year over year.
Backlog for this segment remained healthy with over 4,100 airplanes valued at $285 billion.
Boeing Defense, Space & Security (BDS): This segment recorded revenues worth $6.88 billion in the second quarter, reflecting 47% year-over-year improvement, primarily driven by higher KC-46A Tanker and P-8A Poseidon volume.
Meanwhile, this unit generated operating income of $958 million compared with operating income of $600 million in the year-ago quarter.
Backlog at BDS was $59 billion, 32% of which comprised orders from international clients.
Global Services: Revenues at this segment increased 17% to $4.07 billion higher commercial services volume.
Moreover, this unit generated operating income of $531 million against operating loss of $672 million in the year-ago quarter.
Boeing Capital Corporation (BCC): This segment reported quarterly revenues of $78 million compared with $69 million registered in the year-ago quarter.
At the end of second-quarter 2021, BCC's portfolio balance was $1.9 billion.
Financial Condition
Boeing exited the second quarter with cash and cash equivalents of $8.27 billion, and short-term and other investments of $13.07 billion. At the end of 2020, the company had $7.75 billion of cash and cash equivalents, and $17.84 billion of short-term and other investments. Long-term debt amounted to $57.03 billion at the end of the second quarter, down from $61.89 billion at 2020 end.
Boeing’s operating cash outflow at the end of second-quarter 2021 was $3.87 billion compared with $9.59 billion at the end of second-quarter 2020.
Free cash outflow totaled $4.38 billion at the end of second-quarter 2021 compared with free cash outflow of $10.36 billion at the end of second-quarter 2020.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Boeing has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Boeing has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Boeing (BA) Down 6.5% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Boeing (BA - Free Report) . Shares have lost about 6.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Boeing due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Boeing's Q2 Earnings Beat Estimates, Revenues Rise Y/Y
Boeing reported adjusted earnings of 40 cents per share for second-quarter 2021 in contrast to the Zacks Consensus Estimate of a loss of 65 cents. The bottom line also improved significantly from the year-ago quarter’s loss of $4.79.
Including one-time items, the company reported GAAP earnings of $1 per share against a loss of $4.20 incurred in the second quarter of 2020.
The year-over-year bottom line improvement can be attributed to higher commercial volume and lower commercial airplanes period costs.
Revenues
In the quarter under review, Boeing’s revenues amounted to $16,998 million, which missed the Zacks Consensus Estimate of $17,027 million by 0.2%. The top line however improved 44% from the year-ago quarter’s figure of $11,807 million.
This improvement in top line was driven by higher commercial airplanes and services volume.
Total Backlog
Backlog at the end of second-quarter 2021 was $363.5 billion, slightly down from $364 billion at the end of first-quarter 2021.
Segmental Performances
Commercial Airplane: Revenues at this segment improved a massive 268% to $4.02 billion due to higher commercial jet deliveries. The segment incurred operating loss of $472 million compared with loss of $2.76 billion in the year-ago quarter.
Boeing delivered 79 commercial planes during the quarter under review, up 295% year over year.
Backlog for this segment remained healthy with over 4,100 airplanes valued at $285 billion.
Boeing Defense, Space & Security (BDS): This segment recorded revenues worth $6.88 billion in the second quarter, reflecting 47% year-over-year improvement, primarily driven by higher KC-46A Tanker and P-8A Poseidon volume.
Meanwhile, this unit generated operating income of $958 million compared with operating income of $600 million in the year-ago quarter.
Backlog at BDS was $59 billion, 32% of which comprised orders from international clients.
Global Services: Revenues at this segment increased 17% to $4.07 billion higher commercial services volume.
Moreover, this unit generated operating income of $531 million against operating loss of $672 million in the year-ago quarter.
Boeing Capital Corporation (BCC): This segment reported quarterly revenues of $78 million compared with $69 million registered in the year-ago quarter.
At the end of second-quarter 2021, BCC's portfolio balance was $1.9 billion.
Financial Condition
Boeing exited the second quarter with cash and cash equivalents of $8.27 billion, and short-term and other investments of $13.07 billion. At the end of 2020, the company had $7.75 billion of cash and cash equivalents, and $17.84 billion of short-term and other investments. Long-term debt amounted to $57.03 billion at the end of the second quarter, down from $61.89 billion at 2020 end.
Boeing’s operating cash outflow at the end of second-quarter 2021 was $3.87 billion compared with $9.59 billion at the end of second-quarter 2020.
Free cash outflow totaled $4.38 billion at the end of second-quarter 2021 compared with free cash outflow of $10.36 billion at the end of second-quarter 2020.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Boeing has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Boeing has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.