Improved Product Deliveries to Aid Boeing (BA) in Q4 Earnings

·5 min read

The Boeing Company BA is set to release fourth-quarter 2021 results on Jan 26, before the opening bell.

In the last reported quarter, the company delivered a negative earnings surprise of 252.94%. Solid commercial as well as defense deliveries, along with strong aftermarket commercial jet services volume must have boosted Boeing’s performance in the fourth quarter.

Solid Product Deliveries to Aid Results

Boeing’s fourth-quarter deliveries reflected a solid 67.8% surge in commercial shipments from the year-ago reported figure. Defense shipments also improved 38.2% 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 both its commercial and defense segments is expected to bolster Boeing’s overall fourth-quarter results.

We expect the aforementioned delivery figures for Boeing’s commercial and defense segments to have contributed favorably to the operational performance of the respective business units. This in turn must have boosted fourth-quarter earnings and revenues for both these units in the soon-to-be-reported quarter as well.

The Boeing Company Price and EPS Surprise

The Boeing Company Price and EPS Surprise
The Boeing Company Price and EPS Surprise

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

Expectations for BGS

As far as Boeing Global Services (BGS) unit’s performance in the fourth quarter is concerned, we remain optimistic.

Notably, consistent commercial aerospace market recovery observed in recent times is expected to have prevailed in the soon-to-be-reported quarter as well. Consequently, increased airline flight operations are expected to have boosted aftermarket commercial jet services in the fourth quarter of 2021. This, in turn, must have bolstered the BGS unit’s revenues in the yet-to-be-reported quarter.

Lower severance costs along with a favorable mix of products and services are expected to have boosted the operating margin of the BGS unit. This, in turn, must have favorably contributed to its bottom-line performance in the fourth quarter.

The Zacks Consensus Estimate for the BGS unit’s revenues, pegged at $4,151 million, indicates an improvement of 11.2% from fourth-quarter 2020 reported revenues.

The consensus mark for this segment’s earnings is pegged at $574 million, which indicates a massive improvement from $143 million generated by this unit in fourth-quarter 2020.

Cash Flow Projections

Improved air travel statistics in recent times, which resulted in higher commercial deliveries, along with higher order receipts must have contributed favorably to Boeing’s cash flow reserve in the fourth quarter of 2021. Also reduced expenditures on lower wide-body production rates as well as benefits from Boeing’s business transformation efforts are likely to have boosted its operating cash flow in the soon-to-be-reported quarter.

Q4 Expectations

With the majority of its segments expected to contribute favorably toward the aerospace giant’s fourth-quarter results, we remain optimistic about its revenue and earnings figure.

The Zacks Consensus Estimate for Boeing’s total revenues is pegged at $17.63 billion, suggesting a 15.2% improvement from the prior-year reported number. The consensus estimate for the bottom line is pegged at a loss of 14 cents per share, indicating an improvement from the year-ago quarter’s loss of $15.25.

What the Zacks Model Unveils

Our proven model predicts 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.

Boeing has an Earnings ESP of +61.40% 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 a few defense companies you may also want to consider, as these have the right combination of elements to post an earnings beat this season:

Aerojet Rocketdyne AJRD has an Earnings ESP of +2.00% and a Zacks Rank #2. AJRD has a four-quarter average negative earnings surprise of 2.17%.

The Zacks Consensus Estimate for Aerojet’s fourth-quarter earnings is pegged at 50 cents per share, implying an improvement of 16.3% from the prior-year quarter’s reported figure. Its fourth-quarter revenue estimate, pegged at $578.5 million, suggests an improvement of 3.9% from the last year’s reported figure.

Triumph Group TGI has an Earnings ESP of +1.01% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

TGI delivered a four-quarter average earnings surprise of 101.89%. The Zacks Consensus Estimate for Triumph Group’s fourth-quarter earnings, pegged at 20 cents, has deteriorated 9.1% over the past 30 days. TGI boasts a long-term earnings growth rate of 2.6%.

Textron TXT has an Earnings ESP of +1.02% and a Zacks Rank #3. TXT delivered a four-quarter average earnings surprise of 27.89%.

The Zacks Consensus Estimate for Textron’s fourth-quarter earnings, pegged at 97 cents, has moved up 1% over the past 30 days. TXT boasts a long-term earnings growth rate of 28.3%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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The Boeing Company (BA) : Free Stock Analysis Report

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Aerojet Rocketdyne Holdings, Inc. (AJRD) : Free Stock Analysis Report

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