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Will Solid Service Revenues Aid Boeing's (BA) Q3 Earnings?
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The Boeing Company (BA - Free Report) is set to release third-quarter 2023 results on Oct 25, before the opening bell.
In the last reported quarter, the company incurred a loss of 82 cents per share, narrower than the Zacks Consensus Estimate of a loss of 99 cents. A solid aftermarket services trend is likely to have boosted Boeing’s third-quarter earnings amid impacts of lower jet deliveries and abnormal costs associated with 787 and 777X programs.
Poor Deliveries Likely to Hurt Results
Boeing’s third-quarter deliveries reflect a solid 6.3% decline in commercial shipments from the year-ago quarter’s reported figure. Also, defense shipments declined 22.2% year over year.
For manufacturing companies like Boeing, successful deliveries of finished products play a crucial role in boosting revenue growth. Therefore, a notable deterioration in the jet maker’s deliveries for both its commercial and defense segments is expected to contribute unfavorably to its overall third-quarter results.
Considering the fact that Boeing’s military and commercial revenues accounted for almost 75% of the company’s total revenues as of 2022-end, such a decline in delivery figures for both commercial and defense shipments can be expected to have impacted the company’s overall top-line performance.
Expectations for Boeing Global Services (BGS)
We remain optimistic about the BGS unit’s third-quarter performance. Notably, a steadily growing domestic and international air travel is expected to have bolstered fleet utilization, thereby boosting aftermarket commercial jet services in the third quarter.
This, along with several BA converted freighter and materials management agreements in the recent past, as well as higher government service revenues, are likely to have added an impetus to BGS’ quarterly revenues.
The Zacks Consensus Estimate for the unit’s revenues is pegged at $5,374 million, indicating an improvement of 21.3% from the year-ago quarter’s reported number.
The consensus mark for earnings is pinned at $793 million, indicating growth of 8.2% year over year.
Cash Flow Projections
Strong order activity in the recent past and increased aftermarket services are expected to have favorably contributed to Boeing’s third-quarter cash flow reserve. However, an unfavorable effective tax rate might have resulted in sequentially lower cash flow.
Q3 Expectations
Higher contract revenues, along with solid commercial as well as government service revenues, are likely to have bolstered BA’s overall third-quarter performance. However, lower deliveries, expected abnormal costs in relation to the 787 and 777X programs, and periodic expenses, including research and development spending, might have had some adverse impact on the company’s bottom line.
The Zacks Consensus Estimate for Boeing’s total revenues is pegged at $18.45 billion, implying a 15.6% improvement from the prior-year period’s reported figure. The bottom-line estimate is pinned at a loss of $2.66 per share, indicating a significant improvement from the year-ago quarter’s reported loss of $6.18.
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 here.
Boeing has an Earnings ESP of -13.43% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Below are three defense stocks that have the right combination of elements to post an earnings beat this time around.
General Dynamics delivered a four-quarter average earnings surprise of 2.99%. The consensus estimate for earnings is pegged at $2.87 per share, while that for sales is pinned at $9.94 billion.
L3Harris Technologies (LHX - Free Report) is scheduled to release third-quarter results on Oct 26. LHX has an Earnings ESP of +0.86% and a Zacks Rank #3 at present.
L3Harris delivered a four-quarter average negative earnings surprise of 0.67%. The Zacks Consensus Estimate for LHX’s earnings is pegged at $3.07 per share, while that for sales is pinned at $4.83 billion.
Northrop Grumman (NOC - Free Report) is expected to report third-quarter results on Oct 26. NOC has an Earnings ESP of +1.53% and a Zacks Rank #2 at present.
NOC delivered a four-quarter average earnings surprise of 4.38%. The consensus mark for earnings is pegged at $5.77 per share, while that for sales is pinned at $9.67 billion.
Image: Bigstock
Will Solid Service Revenues Aid Boeing's (BA) Q3 Earnings?
The Boeing Company (BA - Free Report) is set to release third-quarter 2023 results on Oct 25, before the opening bell.
In the last reported quarter, the company incurred a loss of 82 cents per share, narrower than the Zacks Consensus Estimate of a loss of 99 cents. A solid aftermarket services trend is likely to have boosted Boeing’s third-quarter earnings amid impacts of lower jet deliveries and abnormal costs associated with 787 and 777X programs.
Poor Deliveries Likely to Hurt Results
Boeing’s third-quarter deliveries reflect a solid 6.3% decline in commercial shipments from the year-ago quarter’s reported figure. Also, defense shipments declined 22.2% year over year.
The Boeing Company Price and EPS Surprise
The Boeing Company price-eps-surprise | The Boeing Company Quote
For manufacturing companies like Boeing, successful deliveries of finished products play a crucial role in boosting revenue growth. Therefore, a notable deterioration in the jet maker’s deliveries for both its commercial and defense segments is expected to contribute unfavorably to its overall third-quarter results.
Considering the fact that Boeing’s military and commercial revenues accounted for almost 75% of the company’s total revenues as of 2022-end, such a decline in delivery figures for both commercial and defense shipments can be expected to have impacted the company’s overall top-line performance.
Expectations for Boeing Global Services (BGS)
We remain optimistic about the BGS unit’s third-quarter performance.
Notably, a steadily growing domestic and international air travel is expected to have bolstered fleet utilization, thereby boosting aftermarket commercial jet services in the third quarter.
This, along with several BA converted freighter and materials management agreements in the recent past, as well as higher government service revenues, are likely to have added an impetus to BGS’ quarterly revenues.
The Zacks Consensus Estimate for the unit’s revenues is pegged at $5,374 million, indicating an improvement of 21.3% from the year-ago quarter’s reported number.
The consensus mark for earnings is pinned at $793 million, indicating growth of 8.2% year over year.
Cash Flow Projections
Strong order activity in the recent past and increased aftermarket services are expected to have favorably contributed to Boeing’s third-quarter cash flow reserve. However, an unfavorable effective tax rate might have resulted in sequentially lower cash flow.
Q3 Expectations
Higher contract revenues, along with solid commercial as well as government service revenues, are likely to have bolstered BA’s overall third-quarter performance. However, lower deliveries, expected abnormal costs in relation to the 787 and 777X programs, and periodic expenses, including research and development spending, might have had some adverse impact on the company’s bottom line.
The Zacks Consensus Estimate for Boeing’s total revenues is pegged at $18.45 billion, implying a 15.6% improvement from the prior-year period’s reported figure. The bottom-line estimate is pinned at a loss of $2.66 per share, indicating a significant improvement from the year-ago quarter’s reported loss of $6.18.
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 here.
Boeing has an Earnings ESP of -13.43% and a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Below are three defense stocks that have the right combination of elements to post an earnings beat this time around.
General Dynamics (GD - Free Report) is expected to release third-quarter results on Oct 25. GD has an Earnings ESP of +0.61% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
General Dynamics delivered a four-quarter average earnings surprise of 2.99%. The consensus estimate for earnings is pegged at $2.87 per share, while that for sales is pinned at $9.94 billion.
L3Harris Technologies (LHX - Free Report) is scheduled to release third-quarter results on Oct 26. LHX has an Earnings ESP of +0.86% and a Zacks Rank #3 at present.
L3Harris delivered a four-quarter average negative earnings surprise of 0.67%. The Zacks Consensus Estimate for LHX’s earnings is pegged at $3.07 per share, while that for sales is pinned at $4.83 billion.
Northrop Grumman (NOC - Free Report) is expected to report third-quarter results on Oct 26. NOC has an Earnings ESP of +1.53% and a Zacks Rank #2 at present.
NOC delivered a four-quarter average earnings surprise of 4.38%. The consensus mark for earnings is pegged at $5.77 per share, while that for sales is pinned at $9.67 billion.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.