Boeing Stock (NYSE:BA)
Once again, Boeing did not meet the expectations of Wall Street. But by a margin that is much smaller than usual. The stock price has moved higher.
On Wednesday morning, Boeing (NYSE:BA) announced that it had lost $1.27 per share during the first quarter, despite having sales of $17.9 billion. Wall Street anticipated a loss of $1.07 per share and revenue of $17.6 billion in the company’s quarterly report.
On April 28, 2021, Boeing disclosed its earnings for the first quarter of the year. The revenue for the company was $15.2 billion for the quarter, which is a 10% decrease when compared to the same time period in the prior year. The quarterly net loss for Boeing was $561 million, which is equivalent to $0.92 per share. When compared to the results of the first quarter of 2020, when the company reported a net loss of $641 million, or $1.11 per share, this represents a significant improvement.
The Commercial Airplanes segment of Boeing’s business experienced a drop in revenue, with sales decreasing from $6.2 billion in the first quarter of 2020 to $4.3 billion in the first quarter of 2021. When compared to the previous year’s first quarter, the segment delivered 77 aircraft during the first three months of 2021. The higher demand for the 737 MAX aircraft was the primary factor that drove the increase in deliveries.
When compared to the same period the previous year, Boeing BA +1.18% reported a loss of $2.75 per share on revenues of $14 billion.
It is the fourteenth time in the previous seventeen quarters that Boeing has failed to meet estimates for its bottom line. In contrast, the company’s main competitor, Airbus (AIR.France), has fallen short of analysts’ expectations in three of the most recent 16 quarters.
Taking into account all of the headwinds that the company is currently facing, Boeing’s most recent miss is not all that significant. Earnings are still in the process of recovering from the twin setbacks caused by the grounding of the 737 MAX and the impact of Covid-19. Additionally, the airline manufacturer has experienced problems with the delivery and quality of its 787 Dreamliner jets.
In premarket trading, shares of Boeing have gained 3.6% and are currently trading at $209.41. Futures prices for the S&P 500 and the Dow Jones Industrial Average are both unchanged.
The total number of jets that the company delivered during its first quarter was 130, which is an increase from the previous quarter’s delivery total of 95 jets and an improvement over Wall Street’s projection of 120 jets for the period.
Sales in the commercial aviation industry increased to $6.7 billion, from $4.2 billion in the same quarter of the previous year. However, this particular aspect of the business is not yet turning a profit. The loss incurred while operating the business was $615 million.
It is still Boeing’s expectation that it will deliver between 400 and 450 MAX jets in 2023. This indicates that production rates will be increasing to approximately 38 jets per month at some point during this year.
Additionally, annual defense revenue increased, reaching $6.5 billion, up from $5.5 billion the previous year. Despite the fact that the KC-46A tanker program resulted in a charge of $245 million, the operating loss came in at $212 million.
The price of Boeing stock has been quite unpredictable over the course of the past year. The decision made by the FAA to lift the grounding order on the 737 MAX in March 2021 drove the stock to a new 52-week high of $278.57, which was reached in March 2021. However, since that time, the stock has experienced a price decline, and as of today (April 27, 2023), one share of it can be purchased for $215.44.
Both the company’s overall financial performance and its stock price are influenced by a number of different factors. The ongoing pandemic is one of the primary factors, and as a consequence, there has been a decrease in the demand for air travel. This has resulted in a decrease in orders for new aircraft, which has had an effect on the segment of Boeing’s business known as Commercial Airplanes.
The regulatory problems that have been associated with the 737 MAX are another factor. Following two accidents that resulted in the deaths of 346 people, the aircraft was grounded for close to two years. The decision made by the FAA to lift the grounding order has increased confidence among investors; however, concerns about the safety of the aircraft continue to exist.
In spite of these obstacles, there are reasons to have a positive outlook regarding Boeing’s prospects for the future. The company has a healthy backlog of orders, especially in the Defense, Space, and Security segments of the business. Additionally, Boeing is making investments in emerging technologies like electric propulsion systems and autonomous flight, both of which have the potential to drive growth in the company in the years to come.
Rob Stallard, an analyst with Vertical Research Partners, stated that he did not anticipate an earnings beat and that he anticipated more one-time charges similar to the tanker expense.
He suggested that you pay attention to the flow of cash. During that period, there was a negative free cash flow of $800 million. The market on Wall Street anticipated a free cash flow of approximately $1 billion in the positive during the first quarter. However, Boeing did not alter the guidance it provided for its free cash flow for the full year. The company maintains its forecast that it will generate free cash flow in the range of $3 billion to $5 billion.
Investors can breathe a sigh of relief because, on the whole, the quarter performed relatively similarly to their projections.
At 10:30 a.m. Eastern Time (ET), Boeing will hold a conference call to discuss their results. Earnings, cash flow, production rates, and the demand for new aircraft orders are going to be some of the topics that will be discussed.
During the past year, the price of Boeing stock has increased by approximately 15%, while the S&P 500 and the Dow Jones Industrial Average have both decreased by 5% and 1%, respectively. One reason for the improvement in investor sentiment is that there is a brighter future ahead for air travel now that the world has moved on from Covid.
In conclusion, the difficulties that Boeing must navigate in the present economic climate are reflected in the company’s most recent financial results and in the price of its stock. Despite this, there are reasons to be optimistic about the future prospects of the company, particularly in the Defense, Space, and Security segments. Before making any kind of investment decision, investors should always give careful consideration to all of the information that is available to them.
Featured Image: Megapixl
