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Rise in Aftermarket Service to Aid Boeing (BA) in Q3 Earnings?
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The Boeing Company (BA - Free Report) is set to release third-quarter 2022 results on Oct 26, before the opening bell.
In the last reported quarter, the company incurred a loss of 37 cents, much wider than the Zacks Consensus Estimate of a loss of 8 cents. Solid commercial deliveries, driven by improving domestic and international travel trends, must have boosted Boeing’s third-quarter earnings performance amid lower defense deliveries.
Will Mixed Product Deliveries Aid Results?
Boeing’s third-quarter deliveries reflected a solid 31.8% surge in commercial shipments from the year-ago reported figure. However, defense shipments declined 2.7% year over year.
For manufacturing companies like Boeing, successful deliveries of finished products play a crucial role in boosting revenue growth. Therefore, such a significant improvement witnessed in the jet maker’s deliveries for its commercial segment is expected to benefit Boeing’s overall third-quarter results.
The jet giant’s military business revenues comprised almost 43% of total revenues as of 2021-end, while that of the commercial business comprised 31%. The decline in defense shipment might have outweighed the revenue benefits of the solid commercial shipment, thereby hurting the overall Q3 top-line performance.
Expectations for BGS
As far as Boeing Global Services (BGS) unit’s performance in the third quarter is concerned, we remain optimistic.
Notably, a consistent recovery in domestic air travel and recent growth observed in international travel are expected to have bolstered fleet utilization, thereby once again boosting aftermarket commercial jet services in the third quarter of 2022. This, as well as strong cargo markets with several Boeing converted freighter and materials management agreements, must have added an impetus to BGS unit’s Q3 revenues.
However, discontinuation of an engine distribution agreement since the second quarter, which might impact BA’s government service revenue profile, thereby partly impacting the overall performance of the BGS unit in Q3.
The Zacks Consensus Estimate for BGS unit revenues, pegged at $4,556 million, indicates an improvement of 7.9% from third-quarter 2021 reported revenues.
The consensus mark for this segment’s earnings is pegged at $670 million, which indicates a solid improvement of 4% from third-quarter 2021 reported earnings.
Cash Flow Projections
Improved air travel statistics in recent times, which resulted in higher 737 deliveries, along with higher order receipts as well as increased aftermarket services are likely to have contributed to Boeing’s cash flow reserve in the third quarter of 2022.
Q3 Expectations
Considering the aforementioned discussion, we remain optimistic about BA’s overall Q3 revenue and earnings performance. However, the abnormal costs in relation to the 787 program along with supply chain constraints might have had some adverse impact on the company’s bottom line.
The Zacks Consensus Estimate for Boeing’s total revenues is pegged at $18.27 billion, suggesting a 19.6% improvement from the prior-year reported number. The consensus estimate for the bottom line is pegged at a loss of 9 cents per share, indicating an improvement from the year-ago quarter’s loss of 60 cents.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Boeing this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, this is not the case for BA.
Boeing has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are two defense companies you may want to consider as these have the right combination of elements to post an earnings beat this season:
SPR delivered a four-quarter average negative earnings surprise of 100.31%. The Zacks Consensus Estimate for Spirit AeroSystem’s third-quarter bottom line is pegged at a loss of 39 cents, which implies a solid improvement from a loss of $1.13 incurred in the third quarter of 2021.
TransDigm Group (TDG - Free Report) : It is expected to release its third-quarter results soon. TDG has an Earnings ESP of +5.86% and a Zacks Rank #3.
TDG delivered a four-quarter average negative earnings surprise of 5.95%. The Zacks Consensus Estimate for TransDigm’s third-quarter earnings, pegged at $5.03, suggests an improvement of 18.4% from the third quarter of 2021.
An Upcoming Defense Earnings
Spire (SPIR - Free Report) is slated to report its third-quarter results on Nov 9. It holds a Zacks Rank #2.
The Zacks Consensus Estimate for SPIR’s third-quarter earnings, pegged at a loss of 10 cents, has remained unchanged over the past seven days. SPIR boasts a long-term earnings growth rate of 7.9%.
Image: Bigstock
Rise in Aftermarket Service to Aid Boeing (BA) in Q3 Earnings?
The Boeing Company (BA - Free Report) is set to release third-quarter 2022 results on Oct 26, before the opening bell.
In the last reported quarter, the company incurred a loss of 37 cents, much wider than the Zacks Consensus Estimate of a loss of 8 cents. Solid commercial deliveries, driven by improving domestic and international travel trends, must have boosted Boeing’s third-quarter earnings performance amid lower defense deliveries.
Will Mixed Product Deliveries Aid Results?
Boeing’s third-quarter deliveries reflected a solid 31.8% surge in commercial shipments from the year-ago reported figure. However, defense shipments declined 2.7% year over year.
For manufacturing companies like Boeing, successful deliveries of finished products play a crucial role in boosting revenue growth. Therefore, such a significant improvement witnessed in the jet maker’s deliveries for its commercial segment is expected to benefit Boeing’s overall third-quarter results.
The Boeing Company Price and EPS Surprise
The Boeing Company price-eps-surprise | The Boeing Company Quote
The jet giant’s military business revenues comprised almost 43% of total revenues as of 2021-end, while that of the commercial business comprised 31%. The decline in defense shipment might have outweighed the revenue benefits of the solid commercial shipment, thereby hurting the overall Q3 top-line performance.
Expectations for BGS
As far as Boeing Global Services (BGS) unit’s performance in the third quarter is concerned, we remain optimistic.
Notably, a consistent recovery in domestic air travel and recent growth observed in international travel are expected to have bolstered fleet utilization, thereby once again boosting aftermarket commercial jet services in the third quarter of 2022. This, as well as strong cargo markets with several Boeing converted freighter and materials management agreements, must have added an impetus to BGS unit’s Q3 revenues.
However, discontinuation of an engine distribution agreement since the second quarter, which might impact BA’s government service revenue profile, thereby partly impacting the overall performance of the BGS unit in Q3.
The Zacks Consensus Estimate for BGS unit revenues, pegged at $4,556 million, indicates an improvement of 7.9% from third-quarter 2021 reported revenues.
The consensus mark for this segment’s earnings is pegged at $670 million, which indicates a solid improvement of 4% from third-quarter 2021 reported earnings.
Cash Flow Projections
Improved air travel statistics in recent times, which resulted in higher 737 deliveries, along with higher order receipts as well as increased aftermarket services are likely to have contributed to Boeing’s cash flow reserve in the third quarter of 2022.
Q3 Expectations
Considering the aforementioned discussion, we remain optimistic about BA’s overall Q3 revenue and earnings performance. However, the abnormal costs in relation to the 787 program along with supply chain constraints might have had some adverse impact on the company’s bottom line.
The Zacks Consensus Estimate for Boeing’s total revenues is pegged at $18.27 billion, suggesting a 19.6% improvement from the prior-year reported number. The consensus estimate for the bottom line is pegged at a loss of 9 cents per share, indicating an improvement from the year-ago quarter’s loss of 60 cents.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Boeing this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, this is not the case for BA.
Boeing has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are two defense companies you may want to consider as these have the right combination of elements to post an earnings beat this season:
Spirit AeroSystems (SPR - Free Report) : It is scheduled to release its third-quarter results on Nov 3. SPR has an Earnings ESP of +47.19% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
SPR delivered a four-quarter average negative earnings surprise of 100.31%. The Zacks Consensus Estimate for Spirit AeroSystem’s third-quarter bottom line is pegged at a loss of 39 cents, which implies a solid improvement from a loss of $1.13 incurred in the third quarter of 2021.
TransDigm Group (TDG - Free Report) : It is expected to release its third-quarter results soon. TDG has an Earnings ESP of +5.86% and a Zacks Rank #3.
TDG delivered a four-quarter average negative earnings surprise of 5.95%. The Zacks Consensus Estimate for TransDigm’s third-quarter earnings, pegged at $5.03, suggests an improvement of 18.4% from the third quarter of 2021.
An Upcoming Defense Earnings
Spire (SPIR - Free Report) is slated to report its third-quarter results on Nov 9. It holds a Zacks Rank #2.
The Zacks Consensus Estimate for SPIR’s third-quarter earnings, pegged at a loss of 10 cents, has remained unchanged over the past seven days. SPIR boasts a long-term earnings growth rate of 7.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.