Boeing (BA) Up 3.2% Since Last Earnings Report: Can It Continue?

About a month has passed since Boeing’s (BA) last earnings report. Shares rose about 3.2% in that time, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Boeing at risk of pulling out? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to get a better handle on the key drivers.

Boeing’s best estimate for first quarter earnings, revenue declines year over year

For the first quarter of 2024, Boeing Company posted an adjusted loss of $1.13 per share, narrower than the Zacks Consensus Estimate of a loss of $1.43. Financial results also improved compared to the same quarter last year, which recorded a loss of $1.27 per share.

Including one-time items, the company reported a GAAP loss of 56 cents per share, which was narrower than the year-ago quarter’s loss of 69 cents.

Revenue

Boeing had revenues of $16.57 billion, missing the Zacks Consensus Estimate of $17.69 billion by 6.3%. Revenue also declined 8% from the $17.92 billion figure for the year-ago quarter.

The year-on-year deterioration can be attributed to lower commercial delivery volumes.

Total arrears

Backlogs at the end of the first quarter of 2024 were $528.75 billion, compared to $520.20 billion recorded at the end of the fourth quarter of 2023.

Segment appearances

Commercial plane: Revenues in this segment declined 31% year-over-year to $4.65 billion due to lower 737 deliveries. The segment incurred an operating loss of $1.14 billion, indicating a deterioration compared to the operating loss recorded in the same quarter last year year, which amounted to USD 615 million.

During the quarter, Boeing delivered 83 commercial aircraft, down 36% from a year earlier.

The backlog in this segment remains high, with more than 5,600 aircraft worth $448 billion.

Boeing Defense, Space and Security (BDS): The segment reported revenue of $6.95 billion, representing a 6% year-over-year improvement. It generated operating income of $151 million, an improvement over the year-ago quarter’s operating loss of $212 million.

BDS had a backlog of $61 billion, of which 31% were orders from international customers.

Global services: Revenues in this segment increased 7% year-over-year to $5.05 billion, driven by higher trading volumes. The unit generated operating income of $916 million, up from $847 million in the prior-year quarter.

Financial condition

Boeing ended the first quarter of 2024 with cash and cash equivalents of $6.91 billion and short-term and other investments of $0.62 billion. At the end of 2023, the company had cash and cash equivalents of $12.69 billion and short-term and other investments of $3.27 billion. Long-term debt amounted to $46.88 billion, compared to $47.10 billion recorded at the end of 2023.

The company’s operating cash outflow as of March 31, 2024 was $3,362 million compared to $318 million as of March 31, 2023.

Free cash outflow at the end of the first quarter of 2024 was USD 3.93 billion, compared to USD 786 million at the end of the first quarter of 2023.

How have estimates changed since then?

Investors have witnessed a downward trend in estimate revisions over the last month.

As a result of these changes, the consensus estimate moved -395.35%.

VGM results

Currently, Boeing has a Poor Growth Rating of F, which indicates the same momentum score. Plotting a somewhat similar path, the stock received a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the company’s overall VGM score is F. If you’re not focused on one strategy, this score should interest you.

Perspectives

Estimates for this company are generally on a downward trend, and the magnitude of these revisions indicates a downward shift. Notably, Boeing carries a Zacks Rank #3 (Hold). We expect a linear rate of return on the stock over the next few months.

Industry player performance

Boeing is part of the Zacks Aerospace – Defense industry. Over the past month, shares of the same industry RTX (RTX) have gained 3.6%. More than a month ago, the company published its results for the quarter ended March 2024.

RTX reported revenue of $19.31 billion in its most recently reported quarter, representing a year-over-year change of +12.2%. EPS of $1.34 in the same period compared to $1.22 a year ago.

For the current quarter, RTX is expected to report earnings per share of $1.28, which would represent a year-over-year change of -0.8%. The Zacks Consensus Estimate has moved +1% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for RTX. The stock also has a VGM Rating of D.

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